Because CCA Is a Non-Cash Item, in Estimating the Annual

Because CCA is a non-cash item, in estimating the annual after-tax cash flows, we deal with it using one of the following two approaches:
I.Deduct CCA from operating income, then deduct the associated taxes payable, and finally add the amount of the CCA tax savings back.
II.Multiply the CCA by the company's effective tax rate and add this amount to the after-tax operating income.

A) I and II are correct.
B) I and II are incorrect.
C) I is correct, II is incorrect.
D) I is incorrect, II is correct.