Final answer:
The declining-balance method with a depreciation rate of 1.5/N for a service life of N years is known as the Sum-of-the-Years'-Digits method (option b). The correct option is b.
Step-by-step explanation:
The declining-balance method in which the depreciation rate is calculated as 1.5/N for a service life of N years is known as the Sum-of-the-Years'-Digits method (option b).
The Sum-of-the-Years'-Digits method is an accelerated depreciation method that assigns more depreciation expense to earlier years and less to later years. The depreciation rate for each year is determined by dividing the remaining service life by the sum of the digits of the service life.
For example, if the service life is 5 years, the depreciation rate for year 1 would be 5/15 (1/3), for year 2 it would be 4/15, for year 3 it would be 3/15, and so on. The correct option is b.