If Depreciation Expense in Year One of a Project Increases

question 152

Multiple Choice

If depreciation expense in year one of a project increases for a highly profitable company,

• A) net income decreases and incremental free cash flow decreases.
• B) net income increases and incremental free cash flow increases.
• C) the book value of the depreciating asset increases at the end of year one.
• D) net income decreases and incremental free cash flow increases.

---

Definitions:

Meninges

The membranes covering the brain and spinal cord.

Influenza

An acute illness characterized by fever, pain, coughing, and general upper respiratory symptoms.

Fever

An elevation in body temperature above the normal range, often a sign of infection or illness.

General Upper Respiratory Symptoms

Non-specific symptoms affecting the upper respiratory tract, including coughing, sneezing, nasal congestion, and sore throat.