Which of the Following Statements Is CORRECT

question 57

Multiple Choice

Which of the following statements is CORRECT?

• A) Using accelerated depreciation rather than straight line would normally have no effect on a project's total projected cash flows but it would affect the timing of the cash flows and thus the NPV.
• 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 (e.g. ,straight line or accelerated)for stockholder reporting and tax purposes.
• D) Since depreciation is not a cash expense,it has no effect on cash flows and thus no effect on capital budgeting decisions.
• E) Under accelerated depreciation,higher depreciation charges occur in the early years,and this reduces the early cash flows and thus lowers a project's projected NPV.

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Definitions:

Behavior Boundaries

Guidelines, limits, or rules that an individual establishes to identify reasonable, safe, and permissible ways for other people to behave towards them and how they will respond when those limits are crossed.

Personal Philosophy

An individual's set of beliefs, values, and principles that guide their understanding of the world and decision-making process.

Moral Dilemma

A situation in which a person must choose between two or more actions, each of which will lead to a morally significant outcome.