Which of the Following Statements Best Describes CCA

question 64

Multiple Choice

Which of the following statements best describes CCA?

• A) Using CCA method rather than straight-line depreciation would normally have no effect on a project's total projected cash flows but it would affect the timing of the cash flows and thus the NPV.
• B) Corporations must use the same depreciation method (e.g., straight-line or CCA) for stockholder reporting and tax purposes.
• C) Since CCA deduction is not a cash expense, it has no affect on cash flows and thus no affect on capital budgeting decisions.
• D) Under CCA rules, higher CCA deductions occur in the early years, and this reduces the early cash flows and thus lowers a project's projected NPV.

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Definitions:

Genetic Equilibrium

The condition of a population that is not undergoing evolutionary change (i.e., in which allele and genotype frequencies do not change from one generation to the next). See Hardy–Weinberg Principle.

Allele Frequencies

The proportion of various alleles of a gene in a population, which can change over time due to evolutionary pressures, genetic drift, mutation, and gene flow.

MN Blood Type

A blood group system classifying human blood based on the presence or absence of the M and N antigens on the surface of red blood cells.

Genotype Frequency

The proportion of a particular genotype in the population. Compare with allele frequency and phenotype frequency.