Depreciation results in income tax cash savings that are equal to the depreciation expense multiplied by the company's income tax rate.

Question

Quizplus · Accepted Answer

Depreciation is considered as an expense by the company and is deductible for tax purposes. The amount of tax savings from depreciation is calculated by multiplying the depreciation expense by the company's income tax rate. Hence, the given statement is true.

Depreciation Results in Income Tax Cash Savings That Are Equal