If Depreciation Expense Is Taken Over 5 Years Rather Than

question 64

Multiple Choice

If depreciation expense is taken over 5 years rather than 3 years, all things equal,

• A) net present value will go down.
• B) depreciation has no effect on net present value.
• C) net present value will go up.
• D) the answer depends on the company's marginal tax rate.

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Definitions:

Dr. Jekyll and Mr. Hyde

A metaphor derived from Robert Louis Stevenson's classic story, symbolizing the duality of human nature.

Depression

A mental health disorder characterized by persistently low mood, loss of interest in activities, and a variety of emotional and physical problems.

Mood Disorders

A spectrum of psychological conditions characterized by the elevation or lowering of a person's mood, such as depression or bipolar disorder.

Emotional State

The internal condition of a person that involves feelings, moods, and attitudes, which can affect behavior and perception.