Which of the Following Would Be Most Likely to Occur

question 54

Multiple Choice

Which of the following would be most likely to occur in the year when companies have to depreciate equipment over longer lives? Assume that sales, other operating costs, and tax rates are not affected, and the same depreciation method is used for tax and shareholder reporting purposes.

• A) Companies' NOPAT would decline.
• B) Companies' physical stocks of fixed assets would increase.
• C) Companies' net cash flows would increase.
• D) Companies' cash positions would decline.