Which of the following statements is CORRECT? Using accelerated depreciation rather than straight line normally has the
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Using accelerated depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project's forecasted NPV.
Corporations must use the same depreciation method for both stockholder reporting and tax purposes.
Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from investing in the asset.
Using accelerated depreciation rather than straight line normally has the effect of slowing down cash flows and thus reducing a project's forecasted NPV.
Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years or longer.
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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