When Using Accelerated Depreciation, the Present Value of Future Cash

question 88

True/False

When using accelerated depreciation, the present value of future cash flows increases.
By moving greater tax deductions into earlier years that carry a greater PV effect, with all other things being equal, the PV of cash inflows in earlier years is then amplified.

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Definitions:

Notes Receivable

Financial assets representing amounts owed to the holder by others, typically arising from selling goods or services on credit.

Long-Term Credit Sales

Sales made on credit with repayment terms extending beyond the standard period, typically over a year or more.

Profitable Credit Sales

Sales made on credit that generate a profit for the company, after accounting for the cost of goods sold and other expenses related to the sale.

Net Realizable Value

The estimated selling price of goods, minus the costs of their sale or disposal, used in accounting to determine the value of an asset in the balance sheet.