Firms a and B Are in All Points Identical with the Exception

question 2

Multiple Choice

Firms A and B are in all points identical with the exception of their choice of depreciation method for their fixed assets.Firm A uses an accelerated depreciation method while firm B used a straight-line method.In the first year of their operations,which firm has the higher EBITDA

• A) Firm A has the higher EBITDA.
• B) Both firms have the same EBITDA.
• C) Firm B has the higher EBITDA.

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Definitions:

Judicial Opinions

Written statements by judges on a court’s ruling, explaining the legal reasoning behind the decision.

Civil Law

A legal system originated in Europe, characterized by its codification of law, where laws are written into a collection, codex, or system, and serve as the primary source of law.

Criminal Law

The body of law that relates to crime, prescribing conduct perceived as threatening, harmful, or otherwise endangering to people’s property, health, safety, and moral welfare.

Sued

The action of bringing a lawsuit against an individual or entity, claiming harm or wrongdoing that demands legal remedy.