Depreciation results in income tax cash savings which are not relevant in capital budgeting decisions.

Name: Depreciation results in income tax cash savings which are not relevant in capital budgeting decisions.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation results in tax savings that affect cash flows, specifically in terms of reducing taxable income and therefore reducing income tax payable. These cash savings should be considered in capital budgeting decisions as they directly affect the cash flows of a project.

Depreciation Results in Income Tax Cash Savings Which Are Not