Chapter 10 Appendix 10A--De

Chapter 10 Appendix 10A--De - Chapter 10 Appendix...

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Chapter 10 Appendix 10A--Depreciation Chapter 10 Appendix 10A-- Depreciation Student: ___________________________________________________________________________ 1. The primary advantage of accelerated depreciation over straight line depreciation is that the total, undiscounted, depreciation tax savings over the life of the project are greater when an accelerated depreciation method is used. True False 2. A firm that bases its capital budgeting decisions on either NPV or IRR will be more likely to accept a given project if it uses MACRS accelerated depreciation than if it uses the optional straight-line alternative, other things being equal. True False 3. The use of accelerated versus straight-line depreciation causes net income reported to stockholders to be lower, and cash flows higher, for the duration of a project's life, other things held constant. True False 4. Other things held constant, which of the following would increase the NPV of a project being considered? A. A shift from MACRS to straight-line depreciation.
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Chapter 10 Appendix 10A--De - Chapter 10 Appendix...

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