Which of the Following Best Explains Why Is It Sensible

question 36

Multiple Choice

Which of the following best explains why is it sensible for a firm to use an accelerated depreciation schedule such as MACRS rather than straight-line depreciation?

• A) The firm will substantially decrease its depreciation tax shield across all of the depreciation timeline.
• B) The firm can decide over how many years an item may be depreciated, thus allowing it full control of its depreciation expenses.
• C) The firm will have substantially fewer depreciation expenses later in the depreciation timeline.
• D) The firm will receive greater benefits to its cash flow earlier in the depreciation timeline and thus increase net present value (NPV).

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Definitions:

Truth-Functional Compound

A logical compound statement whose truth value is determined solely by the truth values of its components.

Quantifier

A logical term used to specify the quantity of specimens in the domain of discourse that satisfy an open sentence.

Open Sentences

Statements in mathematics that contain one or more variables and can be true or false depending on the values of these variables.

Scope

In discussion or analysis, scope refers to the extent or range of view, outlook, application, operation, or effectiveness of a subject.