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If Depreciation Expense in Year One of a Project Increases

Question 65

Multiple Choice

If depreciation expense in year one of a project increases for a highly profitable company,


A) net income decreases and incremental free cash flow decreases.
B) net income increases and incremental free cash flow increases.
C) the book value of the depreciating asset increases at the end of year one.
D) net income decreases and incremental free cash flow increases.

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