When using accelerated depreciation, the present value of future cash flows increases.
By moving greater tax deductions into earlier years that carry a greater PV effect, with all other things being equal, the PV of cash inflows in earlier years is then amplified.

Question

Quizplus · Accepted Answer

Accelerated depreciation allows for greater tax deductions in earlier years which can increase the present value of future cash flows. This is because the tax savings in earlier years have a greater impact on the present value due to the time value of money.

When Using Accelerated Depreciation, the Present Value of Future Cash