Why Is Accelerated Depreciation Often Favored for the Corporation's Set

question 84

Multiple Choice

Why is accelerated depreciation often favored for the corporation's set of tax books?

• A) It increases the total depreciation tax shield over the project's life.
• B) It reduces the total amount of taxes paid over the project's life.
• C) It increases net accounting profits over the project's life.
• D)It impacts favorably with the time value of money.

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Definitions:

Prime Costs

The combined costs of direct materials and direct labor that are directly attributable to the production process.

Incurred

Refers to costs or expenses that have been realized or acquired in the execution of business activities or operations.

Costs

The expenses incurred in the production of goods or services or in the undertaking of any activity.

Manufacturing Overhead

The indirect costs associated with manufacturing, including costs for maintenance, utilities, and rent of factory facilities, not directly tied to specific units produced.