Accelerated Depreciation Has an Advantage for Profitable Firms in That

question 62

True/False

Accelerated depreciation has an advantage for profitable firms in that it moves some cash flows forward, thus increasing their present value.On the other hand, using accelerated depreciation generally lowers the reported current year's profits because of the higher depreciation expenses.However, the reported profits problem can be solved by using different depreciation methods for tax and stockholder reporting purposes.

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Definitions:

Counterconditioning

A behavior therapy technique that involves pairing a positive stimulus with a fear-evoking stimulus to reduce the fearful response.

Second-order Conditioning

A form of conditioning in which a stimulus is paired with a previously conditioned stimulus, leading to learning without the original unconditioned stimulus.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of time without exposure to the conditioned stimulus.

Unconditioned Response

A natural, instinctive response to a stimulus that happens without any previous learning or conditioning.