Accelerated depreciation for tax purposes will generally produce a present value of tax savings that is _____.

Question

Quizplus · Accepted Answer

Accelerated depreciation allows for greater tax savings in the early years of an asset's life, as more depreciation expense is recognized in those years. This results in a higher present value of tax savings compared to straight-line depreciation, which recognizes the same amount of depreciation expense each year. However, it is not necessarily greater than any other depreciation method, as different methods may be more suitable for different types of assets or industries.

Accelerated Depreciation for Tax Purposes Will Generally Produce a Present