Typically, a project will have a higher NPV if the firm uses accelerated rather than straight-line depreciation.This is because the total cash flows over the project's life will be higher if accelerated depreciation is used, other things held constant.

Question

Quizplus · Accepted Answer

Accelerated depreciation increases early cash flows due to tax savings, but it does not change the total cash flows over the project's life, only their timing.

Typically, a Project Will Have a Higher NPV If the Firm