Immediate Expensing of Depreciation Has an Advantage for Profitable Firms

question 73

True/False

Immediate expensing of depreciation has an advantage for profitable firms in that it moves cash flows forward,thus increasing their present value.On the other hand,in the year that depreciation is immediately expensed the reported current year's profits are lower because of the higher depreciation expenses.However,the reported profits problem can be solved by using different depreciation methods for tax and stockholder reporting purposes.

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Definitions:

Borderline Personality Disorder

A mental disorder characterized by unstable moods, behavior, and relationships, with a marked impulsivity beginning by early adulthood and present in a variety of contexts.

Unstable

Characterized by a lack of consistency, predictability, or emotional control, often leading to significant fluctuations in behavior, mood, or relationships.

Mood

Mood refers to a temporary state of emotion or feeling that can influence an individual's perception and interactions with the world.

Disinhibition Dimension

A personality trait characterized by impulsivity, risk-taking behavior, and a lack of restraint or self-control.