Which Statement, or Statements, Is True About Amortization

question 44

Multiple Choice

Which statement, or statements, is true about amortization?

• A) amortization is a non-cash expense that provides tax shield benefits.
• B) the lesser the amortization expenses in earlier years, the higher the present value of the project.
• C) the CCA amortization schedules supersede other methods for tax purposes.
• D) all of the other answers are correct.

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Definitions:

Expected Value

The average outcome of a random variable, calculated as the sum of all possible values each multiplied by their respective probability of occurrence.

Raffle Tickets

Tickets sold as a means to raise money for a cause, with the chance of winning prizes.

Binomial Distribution

a probability distribution describing the number of successes in a fixed number of independent Bernoulli trials, with a constant probability of success.

Bernoulli Experiment

A random experiment with exactly two possible outcomes, often termed success and failure.