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.

---

Definitions:

Supply

The total amount of a product or service that is available for purchase or use.

Limp

Limp describes a type of walking that is uneven or unsteady, usually because of pain or injury to the leg or foot.

Suffix

a letter or group of letters added at the end of a word to form a new word or alter its function.

Solicit

To ask for or try to obtain something from someone.