Which One of the Following Statements Regarding Depreciation Is Correct

question 85

Multiple Choice

Which one of the following statements regarding depreciation is correct?

• A) The depreciation tax shield adjusts annually with the level of inflation.
• B) The real amount of annual depreciation is fixed, thus the higher the rate of inflation, the higher the depreciation tax shield.
• C) Tax law allows accelerated depreciation to be used for tax purposes.
• D) MACRS can be used for accounting purposes but not for tax purposes.

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