Question: D is wrong. A start-up firm is making an initial investment in new plant and equipment. Assume that currently its equipment must be depreciated on

D is wrong. A start-up firm is making an initial investment

D is wrong.

A start-up firm is making an initial investment in new plant and equipment. Assume that currently its equipment must be depreciated on a straight-line basis over 10 years, but Congress is considering legislation that would require the firm to depreciate the equipment over 7 years. If the legislation becomes law, which of the following would occur in the year following the change? a. Select one The firm's tax payments would decrease @b. The firm's taxable income would increase. c. The firm's net cash flow would decrease. d. The firm's depreciation would decrease. The firm's operating income (EBIT) would increase. X e

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