A Firm That Bases Its Capital Budgeting Decisions on Either

question 67

True/False

A firm that bases its capital budgeting decisions on either NPV or IRR will be more likely to accept a given project if it uses accelerated depreciation than if it uses straight-line depreciation, other things being equal.

---

Definitions:

Home Construction

The process of building residential homes, including planning, design, construction, and sale of new homes.

Prime Costs

The combination of direct materials and direct labor costs.

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services.

Direct Materials

The raw materials that are directly used in the manufacturing of a product, easily traceable to the finished product.