Suppose a corporation can change its depreciation method so that its tax payments decrease by $5,000 this

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Suppose a corporation can change its depreciation method so that its tax payments decrease by $5,000 this year but increase by $5,000 next year.

A. The change will increase the value of the company because the value of this year's cash savings exceeds the cost of next year's cash payments.

B. The change will decrease the value of the company because investors do not like changes in accounting methods.

C. the change will decrease the value of the company because this year's lower tax payments result from lower reported income.

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Jan 03, 2024 04:05 AM

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Suppose a corporation can change its depreciation method so that its tax payments decrease by $5,000 this

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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