Problem

True or false?a. A project’s depreciation tax shields depend on the actual future rate of...

True or false?

a. A project’s depreciation tax shields depend on the actual future rate of inflation.


b. Project cash flows should take account of interest paid on any borrowing undertaken to finance the project.


c. In the U.S., income reported to the tax authorities must equal income reported to shareholders.


d. Accelerated depreciation reduces near-term project cash flows and therefore reduces project NPV.

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Solutions For Problems in Chapter 6