Depreciation

question 32

Multiple Choice

Depreciation

• A) is an allowance for the consumption of capital.
• B) acts as a tax shield.
• C) is not a legitimate cash flow.
• D) All of the above.

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Definitions:

Basket of Goods

A representation of a fixed set of consumer products and services whose total cost is used to measure inflation.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, typically indicating inflation or deflation.

CPI Rose

Refers to an increase in the Consumer Price Index, indicating that the average prices of consumer goods and services have gone up, often a measure of inflation.

$7 Per Hour

A specified wage rate where an individual or worker is paid seven dollars for each hour worked.