Which of the Following Statements Is CORRECT

question 48

Multiple Choice

Which of the following statements is CORRECT?

• A) under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years or longer.
• B) corporations must use the same depreciation method for both stockholder reporting and tax purposes.
• C) using accelerated depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project's forecasted npv.
• D) using accelerated depreciation rather than straight line normally has no effect on a project's total projected cash flows nor would it affect the timing of those cash flows or the resulting npv of the project.
• E) since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected npv from investing in the asset.

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Definitions:

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