Multiple Choice
A firm has a calendar tax year. On January 10, the firm purchased depreciable equipment for cash. This purchase will create:
A) A current cash outflow and an equal decrease in current net income.
B) A current cash outflow and a lesser decrease in current net income.
C) A decrease in net income by an amount equal to the decrease in net assets.
D) No change in net income for the current year.
E) An increase in the total taxes of the firm over a period of years.
Correct Answer:
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