The depreciation tax shield is the amount of income taxes that the company avoids as a result of reporting depreciation expense.

Name: The depreciation tax shield is the amount of income taxes that the company avoids as a result of reporting depreciation expense.
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Quizplus · Accepted Answer

The statement is true. Depreciation expense is tax-deductible, meaning that it reduces a company's taxable income and thus reduces the amount of income taxes it needs to pay. This reduction in taxes is known as the depreciation tax shield.

The Depreciation Tax Shield Is the Amount of Income Taxes