The Present Value at Any Given Discount Rate of the Depreciation

question 11

Multiple Choice

The present value at any given discount rate of the depreciation tax shield is:

• A) equal for all depreciation methods.
• B) higher with MACRS than straight-line depreciation.
• C) higher for the 10^th year than the 7-year recovery period class.
• D) likely to increase annually due to inflation.

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Definitions:

Abundant

Existent in large quantities; plentiful.

Cation

An ion with a positive charge, formed when an atom loses electrons during a chemical reaction.

Chloride

A chemical element that, when combined with sodium, forms table salt (sodium chloride), and plays vital roles in bodily functions.

Magnesium

A chemical element with the symbol Mg and atomic number 12, essential for human health, involved in over 300 biochemical reactions in the body.