Which of the Following Is True of the Depreciation Tax

question 46

Multiple Choice

Which of the following is true of the depreciation tax shield?

• A) It increases annually with the rate of inflation.
• B) It decreases annually in nominal terms.
• C) It is not altered by inflation.
• D) The real value of the depreciation is fixed.

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Definitions:

Logarithmic Equation

An equation involving logarithms, which represents the exponent to which the base of the logarithm must be raised to yield a given number.

Decimal Places

The positions to the right of the decimal point in a number, indicating fractions of ten.

Equation

A mathematical statement that asserts the equality of two expressions, usually involving variables and constants.

Equation

A mathematical statement that asserts the equality of two expressions, represented by the symbol =.