All of the following are tax shields except which one?
A)depreciation allowances
B)straight- line depreciation
C)an interest- only payment of a loan
D)a principal payment on a loan

Question

Quizplus · Accepted Answer

A principal payment on a loan is not a tax shield because it is not deductible for tax purposes. Depreciation allowances, straight-line depreciation, and an interest-only payment of a loan are all tax shields because they reduce taxable income and therefore reduce the amount of taxes owed.

All of the Following Are Tax Shields Except Which One