Which of the Following Statements Is CORRECT

question 28

Multiple Choice

Which of the following statements is CORRECT?

• A) Since depreciation is not a cash expense,and since cash flows and not accounting income are the relevant input,depreciation plays no role in capital budgeting.
• B) Under current laws and regulations,corporations must use straight-line depreciation for all assets whose lives are 3 years or longer.
• C) If they use accelerated depreciation,firms will write off assets slower than they would under straight-line depreciation,and as a result projects' forecasted NPVs are normally lower than they would be if straight-line depreciation were required for tax purposes.
• D) If they use accelerated depreciation,firms can write off assets faster than they could under straight-line depreciation,and as a result projects' forecasted NPVs are normally lower than they would be if straight-line depreciation were required for tax purposes.
• E) If they use accelerated depreciation,firms can write off assets faster than they could under straight-line depreciation,and as a result projects' forecasted NPVs are normally higher than they would be if straight-line depreciation were required for tax purposes.

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Definitions:

Sales Force Estimates

Projections or assessments made by an organization’s sales team regarding future sales volume, based on their direct interaction with the market and customers.

Expert Opinions

Insights and assessments provided by individuals with extensive knowledge or expertise in a particular field, often used to inform decisions or validate assumptions.

Market Tests

Trials conducted to evaluate the potential success of a product or service in a specific market segment before a full-scale launch.

Marketing Plan

A comprehensive document or blueprint that outlines an organization’s advertising and marketing efforts for a specific period, detailing strategies, goals, and activities.