Accelerated depreciation has an advantage for profitable firms in that it moves some cash flows forward, thus increasing their present value.On the other hand, using accelerated depreciation generally lowers the reported current year's profits because of the higher depreciation expenses.However, the reported profits problem can be solved by using different depreciation methods for tax and stockholder reporting purposes.

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This statement is true. Accelerated depreciation can provide a present value benefit to profitable firms by moving cash flows forward, but it can also lower reported profits due to higher depreciation expenses. However, different depreciation methods can be used for tax and stockholder reporting purposes to address this issue.

Accelerated Depreciation Has an Advantage for Profitable Firms in That