Question: Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life. Other

Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life. Other things being equal, which of the following is true?

A) Company A will consistently have the larger net income until residual value is reached.

B) Company A will have higher net income in the early years, but Company B will have higher net income towards the end of the asset's useful life.

C) Company B will have higher net income in the early years, but Company A will have higher net income towards the end of the asset's useful life.

D) Company B will consistently have the larger net income until residual value is reached.

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