Which of the Following Statements Is CORRECT

question 49

Multiple Choice

Which of the following statements is CORRECT?

• A) Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years or longer.
• B) Corporations must use the same depreciation method for both stockholder reporting and tax purposes.
• C) Using accelerated depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project's forecasted NPV.
• D) Using accelerated depreciation rather than straight line normally has no effect on a project's total projected cash flows nor would it affect the timing of those cash flows or the resulting NPV of the project.
• E) Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from investing in the asset.

---

Definitions:

Moral Leader

An individual who prioritizes ethical standards and values in guiding their actions and decision-making processes within an organization.

Free Riding

Occurs when individuals benefit from resources, goods, or services without paying for them, often in the context of public goods.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are accessible to all members of a society and one individual's consumption does not reduce availability to others.

Subsidize

The act of providing financial assistance to individuals, businesses, or industries to support or promote economic activities.