Chapter 12 - Chapter 12 ;RowellCompany'snewbuilding 1 ?a.Becausedepreciation isnotacashexpense,.b.Under , deprec

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Chapter 12 Depreciation in capital budgeting; Rowell Company's new building 1. Which of the following statements is CORRECT? a. Because depreciation  is not a cash expense, it 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. Under  MACRS depreciation, firms write off assets slower than they would under  straight-line depreciation, and as a result projects' forecasted NPVs are  normally lower than they would be if straight-line depreciation were  required for tax purposes. d. Under MACRS depreciation, firms can write  off assets faster than they could under straight-line depreciation, and as a  result projects' forecasted NPVs are normally lower than they would be if  straight-line depreciation were required for tax purposes. e. Under 
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This note was uploaded on 11/28/2010 for the course FIN 3403 taught by Professor Avondstost during the Spring '10 term at Miami Dade College, Miami.

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Chapter 12 - Chapter 12 ;RowellCompany'snewbuilding 1 ?a.Becausedepreciation isnotacashexpense,.b.Under , deprec

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