Problem related to depreciation tax shield


Problem: When deciding whether to buy or lease an asset, the depreciation tax shield is not typically included in the NPV calculation because

Group of answer choices

a) In both alternatives the asset is depreciated by the lessee

b) In both alternatives the asset is depreciated by the lessor

c) Depreciation is not a cash expense and thus it does not affect the decision

d) Companies do not pay taxes

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Other Management: Problem related to depreciation tax shield
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