Discussion
Assertion: an accelerated method reduces the total tax a firm pays on an asset. Reason: it charges more depreciation in the early years.
Answer: D
Correct answer: the assertion is false although the reason offered is a true statement in itself
The reason is true and the conclusion does not follow. An accelerated method takes the same total deduction over the life, so the total tax is unchanged; what changes is when the saving arrives. Because money has a time value, the earlier saving is worth more in present value - a benefit of timing rather than of amount.
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