All Else Equal, the Sooner a Depreciation Allowance Is Taken

question 17

Multiple Choice

All else equal, the sooner a depreciation allowance is taken, ________ .

• A)the more likely the net present value of the investment will be positive
• B)the less likely the net present value of the investment will be positive
• C)the more likely the net present value of the investment will be negative
• D)the less likely the net present value of the investment will be affected

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Definitions:

Promissory Note

A financial instrument where the writer promises to pay a specific sum to a specified person or bearer at a determined date.

Accounts Receivable-Rey Company

This term is not standard; however, "Accounts Receivable" typically refers to the money owed to a company by its customers for goods or services delivered but not yet paid for.

Interest Revenue

Income earned from lending money or investing in interest-bearing financial instruments, recorded in the income statement.

Average Collection Period

The average time it takes for a company to receive payments owed by its customers.