Which of the following statements is most correct?
A) Investment in working capital must be depreciated over the project life according to a straight-line method.
B) If a project incurs an operating loss (a negative taxable income) during a typical tax year, the firm pays no
Income taxes during that year.
C) Whenever a project requires an investment in working capital, the profitability of the project will be
Affected negatively.
D) None of the above

Question

Which of the following statements is most correct? 
A) Investment in working capital must be depreciated over the project life according to a straight-line method.
B) If a project incurs an operating loss (a negative taxable income) during a typical tax year, the firm pays no
Income taxes during that year.
C) Whenever a project requires an investment in working capital, the profitability of the project will be
Affected negatively.
D) None of the above

Quizplus · Accepted Answer

The Answer of Which of the following statements is most correct? 
A) Investment in working capital must be depreciated over the project life according to a straight-line method.
B) If a project incurs an operating loss (a negative taxable income) during a typical tax year, the firm pays no
Income taxes during that year.
C) Whenever a project requires an investment in working capital, the profitability of the project will be
Affected negatively.
D) None of the above

Which of the Following Statements Is Most Correct