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Why Is It Likely That Firms Would Use Straight-Line Depreciation

Question 64

Multiple Choice

Why is it likely that firms would use straight-line depreciation methods for depicting project analysis to shareholders or lenders, if such choice were possible?


A) It increases the NPV of the project
B) It decreases the tax liability of the project
C) It mirrors the market value of the assets
D) It allows asset balances to decline more slowly

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