Why is it likely that firms would use straight-line depreciation methods for depicting project analysis to shareholders or lenders, if such choice were possible?
A)it increases the NPV of the project.
B)it decreases the tax liability of the project.
C)it mirrors the market value of the assets.
D)it allows asset balances to decline more slowly.

Question

Quizplus · Accepted Answer

Straight-line depreciation methods result in a more consistent and predictable pattern of depreciation expenses over the asset's useful life, which can make it easier for shareholders and lenders to understand and evaluate the project's financial performance.

Why Is It Likely That Firms Would Use Straight-Line Depreciation