A question from Financial Reporting & Analysis (level2)
Practice problem 2 for Reading 22
Statement:
Company A uses the straight line method of depreciation for both financial
and tax reporting purposes to account for plant and equipment.
Question:
With respect to the above statement, what would be the most likely effect
in 2010 if Company A were to switch to an accelerated depreciation method
for both financial and tax reporting?
a. Net profit margin would decreases
b. Total asset turnover would increase
c. Cash flow from operating activities would increase
我選的昰a. 答案是c
我可以理解 c的說明 因為會產生 tax savings
但如同解答說明 depreciation exp 會上升 ... Net income會下降
那為什麼不能選a.呢? 感覺也相當直觀說...
先感謝大家幫忙了!
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