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Explain Why the Multiplier Is Greater Than 1

question 179

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Explain why the multiplier is greater than 1.


Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual increments.

Annual After-Tax Lease Payment

The yearly lease payment amount after accounting for tax deductions.

Straight-Line Depreciation

A method of depreciation that allocates an equal amount of the asset's cost to each year of its useful life.

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