Question $1$ of $16$

ABC Corp. buys a delivery van for $$25,000$ with a useful life of five years. How does depreciation affect ABC $\text{'}$s tax liabilities?

Select an answer:

ABC will receive a tax savings based on the depreciation of the truck over each of the five years.

ABC will be able to reduce its first$-$year income taxes based on the depreciation expected over five years.

Income tax will have to be paid at the end of five years based on the value of the truck, even if ABC does not sell it$.$

Income tax will have to be paid on each year's depreciation as though it were a value provided to ABC.