Which of the Following Statements Is CORRECT

question 77

Multiple Choice

Which of the following statements is CORRECT?

• A) Since depreciation is a cash expense,the faster an asset is depreciated,the lower the projected NPV from investing in the asset.
• B) Under current laws and regulations,corporations must use straight-line depreciation for all assets whose lives are 5 years or longer.
• C) Corporations must use the same depreciation method for both stockholder reporting and tax purposes.
• D) Using accelerated depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project's forecasted NPV.
• E) Using accelerated depreciation rather than straight line normally has the effect of slowing down cash flows and thus reducing a project's forecasted NPV.

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Definitions:

Step Change

A significant and sudden change in performance or productivity, typically for the better.

Ballpark Estimate

An approximate calculation or guess made with limited information, usually at an early stage to provide a rough idea of the expected cost or extent of a project or task.

Project Execution Plan

A document outlining the strategy, resources, and processes to be used in carrying out a project.

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals.