When taxing authorities permit a choice among alternative depreciation methods, a firm should choose the alternative that allows it to pay the _____ amount of tax, as _____ as possible, within the law.
A)most; early
B)most; late
C)least; early
D)least; late
E)same; often

Question

Quizplus · Accepted Answer

The correct choice is to pay the least amount of tax as late as possible within the law. This approach maximizes the time value of money, allowing the firm to use or invest the money that would have been paid in taxes for as long as possible before it is due.

When Taxing Authorities Permit a Choice Among Alternative Depreciation Methods