Q. Which of the following statements is correct? (Solved)
1. over a project’s life, a typical business will generate a greater amount of total project cash flows (undiscounted) if a faster depreciation method is adopted.
2. no matter which depreciation method you adopt, total tax obligations over a project’s life remain unchanged.
3. depreciation recapture equals cost basis minus an asset’s book value at the time of disposal, that is, if the salvage value is less than the asset’s cost basis.
4. cash flows normally include depreciation expenses since they represent a cost of doing business.
- b. no matter which depreciation method you adopt, total tax obligations over a project’s life remain unchanged.