Which of the following changes would not decrease the present value of the future depreciation deductions on a specific depreciable asset?
A)a decrease in the marginal tax rate
B)a decrease in the discount rate
C)a decrease in the rate of depreciation
D)an increase in the life expectancy of the depreciable asset

Question

Quizplus · Accepted Answer

A decrease in the discount rate increases the present value of future depreciation deductions because the future deductions are discounted back to the present value at a lower rate, making them worth more in today's dollars. Choices A, C, and D would all decrease the present value of future depreciation deductions through various mechanisms (reducing tax savings, slowing depreciation, and extending the depreciation period, respectively).

Which of the Following Changes Would Not Decrease the Present