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

question 104

Multiple Choice

Why is it likely that firms use straight-line depreciation methods for reporting to shareholders?

• 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.

---

Definitions:

Annual

Pertaining to or occurring every year.

GDP Per Capita

The gross domestic product divided by the population, measuring the average economic output per person and often used as an indicator of living standards.

Population Increases

A rise in the number of individuals within a specific area or country, which can impact resources, employment, and economic growth.

Labor Force

The aggregate count of individuals who are either working or actively looking for work within a specified economy.