Question
The capital budgeting manager for XYZ Corporation, a very profitable high technology company, completed her analysis of Project A assuming 5-year depreciation. Her accountant reviews
The capital budgeting manager for XYZ Corporation, a very profitable high technology company, completed her analysis of Project A assuming 5-year depreciation. Her accountant reviews the analysis and changes the depreciation method to 3-year depreciation. This change will
increase the present value of the NCFs.
decrease the present value of the NCFs.
have no effect on the NCFs because depreciation is a non-cash expense.
only change the NCFs if the useful life of the depreciable asset is greater than 5 years.
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Core Concepts Of Accounting Information Systems
Authors: Mark G. Simkin, Carolyn A. Strand Norman, Scott Paquette
1st Canadian Edition
