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:

Pluralistic Ignorance

A social psychological phenomenon where a majority of group members privately reject a norm, but incorrectly assume that most others accept it, and therefore go along with it.

Psychology Class

An academic course that studies the mind and behavior, covering topics from social interactions to cognitive processes.

Stereotype

A widely held but oversimplified and generalized belief about a particular type of person, group, or thing, which may or may not reflect reality.

Generalized Belief

involves broad, general assumptions or convictions about oneself, others, or the world, often operating unconsciously and influencing behavior and perceptions.