The difference between the before-tax cost and after-tax cost of an asset equals the net present value of the tax savings from any cost recovery deductions with respect to the asset.

Question

Quizplus · Accepted Answer

This statement is true because the before-tax cost of an asset is the cost without any consideration of tax implications, while the after-tax cost takes into account any tax deductions or credits associated with the asset. The net present value of tax savings from cost recovery deductions would be the difference between these two costs, meaning that the statement is accurate.

The Difference Between the Before-Tax Cost and After-Tax Cost of an Asset