Which of the Following Statements Is CORRECT

question 40

Multiple Choice

Which of the following statements is CORRECT?

• A) Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 3 years or longer.
• B) If firms use accelerated depreciation, they 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.
• C) 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.
• 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 higher than they would be if straight-line depreciation were required for tax purposes.
• E) 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.

---

Definitions:

Raymond Cattell

A psychologist known for his work in personality theory, specifically the development of the 16 Personality Factor (16PF) model.

Self-Esteem

An individual’s subjective evaluation of their own worth, comprising feelings of confidence, respect, and self-acceptance.

Constantly-Changing

Refers to something that is in a state of continuous movement or flux, not remaining the same over time.

Dynamic Concept

A notion or idea that is subject to change and capable of evolution or development over time.