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:

Balance Sheet Accounts

Financial accounts that are reported in the balance sheet, including assets, liabilities, and equity accounts, representing a company's financial position at a specific point in time.

Trading Investments

Securities bought and held primarily for selling them in the near term to profit from their price fluctuations.

Other Comprehensive Income

A component of total comprehensive income that includes unrealized gains and losses affecting shareholders' equity not included in net income.

Unrealized Loss

A loss that results from holding onto an investment that has decreased in value, but has not yet been sold by the investor.