The use of accelerated depreciation:____.a. discourages investment in plant and equipment. b. increases expenses and decreases cash flow.c. initially decreases the firm's taxes. d. initially increases the firm's profits.

Answers

Answer 1
Answer:

Answer:

c. initially decreases the firm's taxes

Explanation:

Accelerated depreciation provides for a higher rate of capital allowance on the assets that is New and Unused and brought in the business for use in manufacturing for the first time. This allowance then lowers for the other years. The purpose of this is to encourage  investment in plant and equipment as it initially decreases the firm's taxes.

Answer 2
Answer:

Final answer:

Using accelerated depreciation initially decreases the firm's taxes. The method increases the firm's expenses in the early years, reducing taxable income and therefore the tax owed. It neither initially increases profits nor discourages investment in plant and equipment.

Explanation:

The use of accelerated depreciation primarily has the following effect: it initially decreases the firm's taxes. When a business uses accelerated depreciation, a larger portion of a plant or equipment's total cost is expensed in the early years of its useful life.

This initially increases the company's expenses, thereby reducing the firm's taxable income and consequently, the amount of taxes that it owes. Over time, however, the amount of depreciation would decrease, but in the beginning, the tax burden is significantly lowered.

This method does not increase the firm's profits initially, nor does it discourage investment in plant and equipment. Instead, it promotes such investments as it offers tax advantages.

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Related Questions

Investments and loans base their interest calculations on one of two possible methods: the interest and the interest methods. Both methods apply three variables-the amount the interest rate, and the investment or deposit period-to the amount deposited or invested in order amount of interest. However, the two methods differ in their relationship between the variables. Assume that the variables r, n, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? FV = PV + (PV Times r Times n) FV = PV Times (1 + r)^n FV = (1 + r)^n/PV Simple interest? FV = PV + (PV Times r Times n) FV = PV/(1 Times r Times n) FV = PV - (PV Times r Times n) Identify whether the following statements about the simple and compound interest methods are true or false. The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods. After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year. Laura is willing to invest $45, 000 for eight years, and is an economically rational investor. She has identified three investment alternatives (L, M, and P) that vary in their method of calculating interest and in the annual interest rate offered. Since she can only make one investment during the eight-year investment period, complete the following table and indicate whether Laura should invest in each of the investments.
Following is a list of financial statement items and amounts for Vantage Service as of 12/31/Year 1, the end of its first year in operation.Accounts Receivable $ 41,300Accounts Payable 31,300Cash 10,130Common Stock 21,300Notes Payable 10,260Equipment 50,650Sales Revenue 106,500Fuel Expense 10,130Rent Expense 11,200Advertising Expense 5,130Salaries and Wages Expense 21,300Retained Earnings ?Dividends 19,520Required: Prepare the Income Statement for the year ended December 31, Year 1. Prepare the statement of retained earnings for the year ended December 31, Year 1. Prepare the balance sheet for the year ended December 31, Year 1.
The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow. The owner then used multiple regression analysis to predict gross revenue (y), in thousands of dollars, as a function of television advertising (x1), in thousands of dollars, and newspaper advertising (x2), in thousands of dollars. The estimated regression equation was ŷ = 83.2 + 2.29x1 + 1.30x2. (a) What is the gross revenue (in dollars) expected for a week when $4,000 is spent on television advertising (x1 = 4) and $1,500 is spent on newspaper advertising (x2 = 1.5)? (Round your answer to the nearest dollar.)
When aggregate demand is high enough to drive unemployment below the natural rate:_________a. there is downward pressure on the price level, and the government may want to conduct contractionary fiscal policy. b. the economy is slipping into a recession, and the government may want to conduct expansionary fiscal policy. c. there is upward pressure on the price level, and the government may want to conduct contractionary fiscal policy. d. there is upward pressure on the price level, and the government may want to conduct expansionary fiscal policy. e. there is downward pressure on the price level, and the government may want to conduct expansionary fiscal policy.
Which of the following measures the cash available to the company's investors? a. operating cash flow b. free cash flow c. net cash flow d. investing cash flow

Which of the following is least likely to result in product innovations that have near-term commercial application? Multiple Choice development quality function deployment process blueprinting applied research basic research

Answers

Basic research is the least likely to result in product innovation that have near-term commercial application

Explanation:

Basic research, is otherwise called pure research. This is the first step in production innovation. This is followed by "applied research", then "innovation development", then to go for "production-sales-market".

The information gathered here will be very light or a starter. It is not possible to foresee all the outcomes or the benefits which is achieved in the basic research.

We cannot even predict the types of research knowledge which might add a value to the future changes

What is the overall rate of return on a $155,000 investment that returns 23% on the first $15,000 and 16% on the remaining money

Answers

Answer:

The  overall rate of return is 16.67%

Explanation:

The computation of the overall rate of return is shown below:

= Actual amount return ÷ investment amount

= ($15,000 × 23% + $140,000 × 16%) ÷ ($155,000)

= ($3,450 + $22,400)  ÷ ($155,000)

= ($25,850) ÷ ($155,000)

= 16.67%

Hence, the  overall rate of return is 16.67%

We simply applied the above formula and the same is to be considered

Cyclical unemployment arises when:______. a. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply.
b. labor unions strike for higher wages.
c. the business cycle enters an expansionary phase.
d. business activity in the macroeconomy declines.

Answers

Answer:

D

Explanation:

types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  

The geologist lost his hob permanently due to increase in wages (polices)

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

Final answer:

Cyclical unemployment arises when business activity in the macroeconomy declines. It is directly linked to the ups and downs in the business cycle. When the economy moves into a recession, cyclical unemployment increases as businesses lay off workers.

Explanation:

Cyclical unemployment arises when: business activity in the macroeconomy declines. This is option D. It refers to the unemployment which is caused by the ups and downs in the overall economy, a phenomenon known as the business cycle. When the economy enters into a recession or contractionary phase, overall demand decreases, and businesses lay off workers as a result leading to an increase in unemployment. This is known as cyclical unemployment.

On the other hand, when the economy is in an expansionary phase, businesses are typically doing well and unemployment levels decrease as businesses hire more workers to meet the increased demand. Therefore, cyclical unemployment is directly related to the health of an economy.

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Nora is interested in a career in human resource management. She expected her first job to focus on giving employees access to information and enrollment forms for training, benefits, and other programs. However, she has since learned that HR employees spend less time doing that kind of work. Which trend is behind that change

Answers

Answer:

employees can now get such information through self-service

Explanation:

The trend behind this change is that, employees can now get such information through self-service. Human resource Employees spend less time doing such work now because such information is readily available on the internet and can be accessed by any employee at anytime that they want to do so on their own.

If Congress ends an investment tax credit that used to subsidize domestic investment, how would this affect the market for loanable funds in an open economy context?

Answers

Answer: Demand will fall, Interest rates will fall

Explanation:

The investment tax credit would have encouraged more companies to seek loanable funds in order to embark on investment opportunities because they would be taxed less. This increase in demand in the market for loanable funds would have led to rates rising to keep up with demand.

If Congress were to end this credit, the incentive to invest and avoid tax would be gone. Companies would therefore demand less loanable funds and with this drop in demand there will be a drop in interest rates as well to entice people to borrow at the lower rates.

The welding department supplies parts to the final assembly line. Management decides to implement a kanban system and has collected the following data. The daily demand is 2000 units The production lead time is 4 days (this includes processing time, transport time, and waiting time) Management has decio One container fits 400 units How many kanban containers will be needed to support this system? _____ containers

Answers

Answer:

25 kanban containers

Explanation:

Given that,

Daily demand = 2,000 units

Production lead time = 4 days

Container size = 400 units

Lead time demand:

= Daily demand × Production lead time

= 2,000 units × 4 days

= 8,000 units

Safety Stock:

= Number of days × Daily demand

= 1 day × 2,000 units per day

= 2,000 units

Number of Kanban containers needed:

= (Lead time demand + Safety Stock) ÷ Container size

= (8,000  + 2,000) ÷ 400

= 10,000 ÷ 400

= 25

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