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:

Anesthesia

The administration of agents that block the sensation of pain and other sensations, creating a state of unconsciousness or sedation, typically used in surgical procedures.

Benign Prostatic Hypertrophy

A non-cancerous enlargement of the prostate gland, a common condition in older men which can affect urinary functions.

ICD-10

The 10th revision of the International Classification of Diseases, a medical classification list by the World Health Organization that codes for diseases, signs, symptoms, and social circumstances.

E Code

A type of code in the ICD-9. E codes identify the external causes of injuries and poisoning.