Why do we prefer diminishing value depreciation rather than straight line depreciation.
In the diminishing value depreciation method, the annual depreciation expense decreases over the useful life of the asset.In the early years of the life of the asset, the depreciation expense will be higher when compared to the straight line depreciation expense.
Thus by adopting the diminishing value depreciation, a firm can save higher amount of taxes in the initial years of purchasing the asset whereas in straight line depreciation the amount of taxes saved will be less in the initial years when compared to diminishing value method. In the straight line method the depreciation expense will be the same throughout the useful life of the asset.
Thus firms prefer to use diminishing value depreciation rather than straight line depreciation.
Why do we prefer diminishing value depreciation rather than straight line depreciation.
The primary advantage to immediately expensing depreciation rather than using straight-line depreciation is that with immediate expensing the total amount of depreciation that can be taken, assuming the asset is used for its full tax life, is greater. a. True b. False
What is the effect of using MACRS rather than straight-line depreciation? It increases the NPV. The total amount of depreciation is increased. It increases gross fixed assets. It allows asset book values to increase with market values.
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line? Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
What is a production possibilities frontier? Why is it typically drawn as a curve rather than a straight line? How can a frontier explain the concept of productive efficiency? Provide examples and explain your answer.
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's regular dividend.
Why do we focus on cash flows rather than accounting profits in making our capitalbudgeting decisions? Why are we interested only in incremental cash flows rather than total cash flows?
Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting?
Why do we build trees starting with the number of shared derived characters rather than the number of shared ancestral characters?
1.) Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting? 2.) What is the purpose of listing the account “Commitments and contingencies” on the balance sheet even through no dollar amounts appear? 3.) How is it possible for a company with positive retained earnings to be unable to pay a cash dividend? 4.) The King Corporation has total annual revenue of $800,000; expenses...
A study found that of 300 people 60% of them prefer to eat hamburgers rather than hot dogs. Find the 95% confidence interval for the true population of people who prefer to eat hamburgers rather than hot dogs in the entire population.