Which of the Following Is the Best Definition for Depreciation

question 156

Multiple Choice

Which of the following is the best definition for depreciation (CCA) tax shield?

• A) The difference between a firm's future cash flows with a project and without the project.
• B) The portion of cash flows of a new project that come at the expense of a firm's existing operations.
• C) The present value of a project's costs calculated on an annual basis.
• D) Tax saving that results from the CCA deduction, calculated as depreciation multiplied by the corporate tax rate.
• E) Evaluation of a project based on the project's incremental cash flows.

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Definitions:

Time-series Data

Data points collected or recorded at successive times, often with equal intervals between them.

Cross-sectional Data

A type of data collected by observing many subjects at the same point of time or without regard to differences in time.

Synchronous Data

Data that is collected or updated at the same time across the system or in a coordinated manner.

Cross-sectional Data

Data collected from a population at a specific point in time, used to observe variations among subjects.