Higher depreciation rates:
A)Allow more depreciation over the asset's life
B)Decrease the depreciation tax shield
C)Increase the depreciation tax shield
D)Allow assets to be depreciated more rapidly

Question

Quizplus · Accepted Answer

Higher depreciation rates allow assets to be depreciated more rapidly, meaning that more of the asset's value is allocated to depreciation expenses each year, reducing the taxable income and increasing the depreciation tax shield. This can result in lower taxes and improved cash flows.

Higher Depreciation Rates