A Company Uses Straight-Line Instead of the Units of Production

question 1

Multiple Choice

A company uses straight-line instead of the units of production method of depreciation. Assuming a tax rate of zero, which statement is true as a result of its choice of depreciation methods?

• A) Cash flows from operations will be less than under the straight-line method
• B) Cash flows from operations will be more than under the straight-line method
• C) Cash used for investing activities will be more than under the straight-line method
• D) Cash used for investing activities will be less than under the straight-line method.
• E) Cash flows are the same as if the straight-line method had been used.

---

Definitions:

Manipulated

Altered or controlled in a skillful or sometimes deceitful manner.

George Orwell

An English novelist, essayist, journalist, and critic, best known for his dystopian novel "1984" and the allegorical novella "Animal Farm."

Free Thought

The philosophy that opinions should be formed on the basis of logic, reason, and empiricism, rather than authority, tradition, or dogma.

Rhetorical Device

A technique used in writing or speaking to persuade, influence, or please an audience.