Why Is It Likely That Firms Would Use Straight-Line Depreciation

question 32

Multiple Choice

Why is it likely that firms would use straight-line depreciation methods for depicting project analysis to shareholders or lenders, if such choice were possible?

• A)it increases the NPV of the project.
• B)it decreases the tax liability of the project.
• C)it mirrors the market value of the assets.
• D)it allows asset balances to decline more slowly.

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Definitions:

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