Which of the following statements is CORRECT? a. Under current laws and regulati

Question

Which of the following statements is CORRECT?

a.     Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 3 years or longer.

b.    If firms use accelerated depreciation, they will 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.

c.     If they use accelerated 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.

Explanation / Answer

c.If they use accelerated 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.

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