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).

---

Definitions:

Brother

A male sibling or a term used to express camaraderie or fraternity among men.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed directly.

Sensorimotor

Relating to or involving both sensory and motor functions or pathways, often used in reference to a stage in early child development.

Preoperational

A stage in Piaget's theory of cognitive development where children from ages 2 to 7 have increasing mental representation but do not yet understand concrete logic.