Which statement is true concerning depreciation?

Question

Quizplus · Accepted Answer

Depreciation should be considered in cash flow analysis as it represents the decrease in value of the asset over time and affects the company's ability to generate cash. Option A is false as depreciation affects taxable income by reducing it. Option C is false as depreciation is relevant for decision making, especially in capital budgeting. Option D is false as depreciation is affected by income tax laws, such as the Modified Accelerated Cost Recovery System (MACRS) in the United States.

Which Statement Is True Concerning Depreciation