The Present Value of the Depreciation Tax Shield at Any

question 69

Multiple Choice

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

• A) equal for all depreciation methods.
• B) higher with MACRS than with straight-line depreciation.
• C) higher for the 7-year recovery period than for the 5-year recovery period class.
• D) likely to increase annually due to inflation.

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Definitions:

External Locus

External locus of control refers to the belief that one's life events are largely controlled by external forces or other people rather than one's own efforts.

Life Expectancy

The average period that a person may expect to live, based on statistical averages.

Mindfulness Meditation

A practice of mindfulness involving focusing the mind on the present moment without judgment, often used as a stress reduction technique.

Optimism

The tendency to expect the best possible outcome or to dwell on the most hopeful aspects of a situation.