What is depreciation and amortization? What's the difference? It is an accounting concept that has an indirect impact on cash flow as it is deductible for tax purposes and lowers the overall amount of taxes paid for that period. Therefore, it does impact or lower cash outflows for taxes. That is called the tax shield of depreciation and amortization. Over the course of my career, companies have increased their percentage of intangible property that must be amortized. Now, it is very common where companies will have little property, plant and equipment, but lots of intangible property. Why?

Q: Discuss the difference between the straight-line method of depreciation and the accelerated methods.…

A: The key difference between straight-line method and the accelerated method is that, under…

Q: In which situation does the tax depreciation allow the firms to defer paying income taxes?

A: Deferment of income tax liability is also called as Deferred Tax Liability. It means tax liability…

Q: The primary advantage to using accelerated rather than straight-line depreciation is that with…

A: Accelerated depreciation is a method of depreciation in which an asset is expensed at a faster rate…

Q: When calculating free cash flows, which of the following statements is NOT true regarding the…

A: Depreciation refers to the decrease in the value of an asset over time as a result of wear and tear,…

Q: Answer for question 6 is still wrong. What would be the impact on cash flow if depreciation was…

A: Cash flow includes only cash dealt transactions. Since depreciation is a non-cash item, it is added…

Q: Which of the following statements are true? Select one or more: a. MACRS must be used for book…

A: MACRS In the United States, MACRS (Modified Accelerated Cost Recovery System) is a form of…

Q: In accounting, which aspect pertains to the tax implications arising from compliance with…

A: Environmental regulations are regulations issued by the government in connection with climate…

Q: Poston Company uses an accelerated depreciation method for tax purposes rather than straight-line…

A: There are many methods for taking depreciation it depends on the choice of company to take…

Q: What is a modified accelerated cost recovery system(MACRS)? Speculate as to why this system is…

A:

Q: Which statement is TRUE? If next years' tax rate will go down, companies with more existing deferred…

A: Solution Tax is the mandatory contribution that is levied by the government entity on individuals…

Q: preciate assets such as buildings even though those assets may be increasing in value. Why?

A:

Q: For each statement in parts a to d, give a short answer or indicate True orFalse. a. Which of the…

A: Cash flows are the cash receipts and the payment the organization receives the given period of time.…

Q: How can we deal with Salvage value and gains tax:?

A: Depreciation: The term depreciation refers to the fall in the monetary value of assets due to its…

Q: perating Cash flows and this after tax does not come as correct on m

A: When equipment is sold above the book value than there are taxes to paid on the capital gains that…

Q: The IRS rule for capitalizing a purchase is if it is over $2,500.  But this is not necessarily the…

A: There is a rule through which company is not allowed to show those costs as expenses rather than…

Q: lease answer Question 3 and Question 6. What would happen to net income and cash flow if…

A: Net income is the cash flow available after doing payments for all kind of expenses and this amount…

Q: Calculate the EBIT. EBIT Calculate the net income. Net income

A: EBIT:  Earnings before interest and taxes show the indication of the profitability for the…

Q: A company is deciding whether to purchase a new machine or not, which among the following is not a…

A: A company is deciding whether to purchase a new machine or not is deiced by the Net present value of…

Q: A business executive once stated, “Depreciation is one of our biggest sources of cash.” Do youagree…

A: Introduction Depreciation is reduction in value of an asset and is actually a non-cash arrangement…

Q: The purpose of Sec. 1245 is to eliminate the advantage taxpayers would have if they were able to…

A: Sec. 1245 and Sec . 1231 are sections of  U.S. Internal Revenue Code.

Q: is less Tax on Profit on Sale of Asset and less Operating Costs (revenue and expenses) or (other…

A: Capital Budgeting helps the company to check the viability of the project. It will help the company…

Q: Many companies use an accelerated depreciation method because: A. It is required by the tax code. B.…

A: Depreciation is the allocation of cost of asset over the useful life of the asset.

Q: Assuming that there are no income taxes, which of the following is correct concerning depreciation?…

A: Depreciation is reduction in value of asset due to wear and tear of asset with the passage of time…

Q: After-Tax Cash Flows For each of the following independent situations, compute the net after-tax…

A: In capital budgeting decisions, net after-tax cash flows are used in analyzing an investment…

Q: The use of accelerated depreciation for tax purposes and straight-line depreciation for accounting…

A: Solution: The use of accelerated depreciation for tax purposes and straight line depreciation for…

Q: In replacement analysis, an increase in depreciation expense due to purchase of a new asset will: 1)…

A: Given: The depreciation expense increase due to the new asset purchase.

Q: Given the frequently changing nature of depreciation and tax law,what must we use?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: f a company is seeking to minimize its income tax expense, the depreciation method it would most…

A: Each company have choice to choose method of depreciation and depreciation method used must be based…

Q: Depreciation is the reduction in the usable value of fixed assets due to normal wear and tear of…

A: Normal depreciation: It refers to the reduction in the value of an asset over a period of time due…

Q: Depreciation is not considered in the computation of the payback period

A: Payback period is the time required to recover the initial investment. It is computed by dividing…

Q: In relation to evaluating non-current assets, indicate which of the following statements is TRUE?…

A: Assets are the resources owned and controlled by the business. There are various categories of…

Q: This depreciation method was brought about by the Tax Reform Act of 1986 a. Straight-Line O b.…

A: Fixed assets are those assets which are held by the business for longer period of time. For example,…