Under the "modified accelerated-cost-recovery system" (MACRS) of depreciation, cash flow tends to decline with the passage of time.

Question

Quizplus · Accepted Answer

MACRS allows for greater depreciation in the early years of an asset's useful life, which results in higher tax deductions and lower taxable income, leading to lower cash flows. As the asset ages, depreciation expense decreases, and cash flow tends to increase.

Under the "Modified Accelerated-Cost-Recovery System" (MACRS) of Depreciation, Cash Flow