The total depreciation tax shield equals the product of depreciation and the tax rate.

Name: The total depreciation tax shield equals the product of depreciation and the tax rate.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The depreciation tax shield refers to the tax savings that a company receives due to the tax deduction it receives for the depreciation expense on its assets. The amount of the tax shield is equal to the amount of depreciation multiplied by the company's tax rate.

The Total Depreciation Tax Shield Equals the Product of Depreciation