The Spinach Corporation just purchased an expensive piece of equipment. Assume that the firm planned to depreciate the equipment over 5 years, but then the taxation office passed a provision that requires the company to depreciate the equipment over 7 years. Which of the following will occur as a result of this new law? Select one: a. cash position will improve b. net income will be lower c. operating income, or EBIT, will increase d. taxable income will be lower
The Spinach Corporation just purchased an expensive piece of equipment. Assume that the firm planned to depreciate the equipment over 5 years, but then the taxation office passed a provision that requires the company to depreciate the equipment over 7 years. Which of the following will occur as a result of this new law? Select one: a. cash position will improve b. net income will be lower c. operating income, or EBIT, will increase d. taxable income will be lower
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Spinach Corporation just purchased an expensive piece of equipment. Assume that the firm planned to depreciate the equipment over 5 years, but then the taxation office passed a provision that requires the company to depreciate the equipment over 7 years. Which of the following will occur as a result of this new law?
Select one:
a. cash position will improve
b. net income will be lower
c. operating income, or EBIT, will increase
d. taxable income will be lower
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