In capital budgeting decisions, amortization shields part of operating income from the effect of income taxes.

Name: In capital budgeting decisions, amortization shields part of operating income from the effect of income taxes.
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Quizplus · Accepted Answer

Amortization expense reduces the taxable income of the company, which in turn reduces the amount of income tax paid by the company. Therefore, amortization shields part of operating income from the effect of income taxes.

In Capital Budgeting Decisions, Amortization Shields Part of Operating Income