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What is the component and straight-line method of determining the reserve allocation?

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What is the component and straight-line method of determining the reserve allocation?

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The component method determines reserve allocation by dividing cost by useful life for each component and then totaling. The straight-line method is similar, and determines reserve allocation by dividing the difference between fully funded balance and reserve balance by the remaining life for each component and then totaling. Both methods provide for independent funding of each component.

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