Final answer:
Using the diminishing-balance method of depreciation results in higher depreciation expenses in the initial years and lower profit, contradicting the statement which is therefore false.
Step-by-step explanation:
The question relates to the concept of depreciation using the diminishing-balance method. In this method, depreciation is charged at a constant percentage on the reducing book value of the asset each year. This means that in the early years, the depreciation expense is higher, which lowers the profit compared to methods that spread the depreciation more evenly over the asset's useful life. Therefore, the statement that a company using the diminishing-balance method of depreciation will have higher profit in the early years of the asset is false.