Which of the Following Statements Is CORRECT

question 12

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.