Which of the Following Statements Is CORRECT

question 9

Multiple Choice

Which of the following statements is CORRECT?

• A) Since depreciation is not a cash expense,and since cash flows and not accounting income are the relevant input,depreciation plays no role in capital budgeting.
• B) Under current laws and regulations,corporations must use straight-line depreciation for all assets whose lives are 3 years or longer.
• C) If firms use bonus depreciation,they will write off assets slower than they would under straight-line depreciation,and as a result projects' forecasted NPVswould normally be lower than they would be if straight-line depreciation were required for tax purposes..
• D) If firms use bonus depreciation,they can write off assets faster than they could under straight-line depreciation,and as a result projects' forecasted NPVs would normally be lower than they would be if straight-line depreciation were required for tax purposes.
• E) If firms use bonus depreciation,they can write off assets faster than they could under straight-line depreciation,and as a result projects' forecasted NPVs would normally be higher than they would be if straight-line depreciation were required for tax purposes.

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Definitions:

Corporate Culture

An organization’s network that includes the shared values and assumptions within it.

Group Dynamics

The set of interpersonal relationships within a group that determine how group members relate to one another and that influencetask performance

Coercive Power

Power that depends on the threat of possible punishment.

Legitimate Power

A form of power that comes from a formal management position in an organization and the authority granted to it.