financial statements6

financial statements6 - Changes in depreciation i . Diff: E...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Changes in depreciation Answer: e Diff: E i . Congress recently passed a provision that will enable Piazza Cola to double its depreciation expense for the upcoming year. The new provision will have no effect on the company’s sales revenue. Prior to the new provision, Piazza’s net income was forecasted to be $4 million. The company’s tax rate is 40 percent. Which of the following best describes the impact that this provision will have on Piazza’s financial statements? a. The provision will increase the company’s net income. b. The provision will reduce the company’s net cash flow. c. The provision will increase the company’s tax payments. d. All of the statements above are correct. e. None of the statements above is correct. Changes in depreciation Answer: e Diff: E N ii . The Campbell Corporation just purchased an expensive piece of equipment. Originally, the firm was planning on depreciating the equipment over 5 years on a straight-line basis. However, Congress just passed a provision that will force the company to depreciate its equipment over 7 years on a straight-line basis. Which of the following will
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

financial statements6 - Changes in depreciation i . Diff: E...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online