Regarding expensing an asset's cost immediately versus

capitalizing the cost and depreciating it over time: All else

the same given a choice a tax paying firm would generally

prefer to:

A capitalize the cost and depreciate, because this will

make the current year's net income higher.

B capitalize the cost and depreciate, because it is best

to extend the depreciation tax shield into the future

as much as possible.

C expense the asset to capture the tax shield

immediately and thereby maximize the present value

of the tax shield.

D expense the asset to maximize the current year's net

income.

E none of the above.