QUESTION
33. Firm A uses straight-line depreciation. Firm B uses MACRS depreciation. Both firms bought $60,000 worth of equipment
Category: Business
Subject: Finance
Due Date: 02/02/2016
Question Asked: 2016-02-02 13:15:35
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33. Firm A uses straight-line depreciation.
Firm B uses MACRS depreciation. Both firms bought $60,000 worth of equipment
last year. Both firms are in the 35 percent tax bracket. The operating cash
flows for each firm are identical except for the depreciation effects. Given
this, you know the:
A. depreciation expense for Firm A will be greater than Firm B's expense
every year.
B. equipment has a higher value on Firm B's books than on Firm A's at the
end of year two.
C. operating cash flow of
Firm A is less than that of Firm B for year two.
D. market value of Firm A's equipment is greater than the market value of
Firm B's equipment.
E. market value of Firm B's equipment is greater than the market value of
Firm A's equipment.
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33. Firm A uses straight-line depreciation. Firm B uses MACRS depreciation. Both firms bought $60,000 worth of equipment
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Posted on 2016-02-02 13:15:35
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...er than Firm B's expense every year. B. equipment has a higher value on Firm B's books than on Firm A's at the end of year two. C. operating cash ...
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