If you switch from straight line to accelerated depreciation, does the NPV of your FCFs go up because you get a lower tax bill in earlier years? Or does it not make a difference since the total depreciation amount is the same in both cases (straight line and accelerated)?
Trending Content - Investment Banking Forum
| Current and Former UBS Bankers: Do You Regret Joining? Was It Worth It? | 38 | 1h | |
| +181 | UBS IB Americas has failed, now behind Santander and Stiffel | 35 | 3d |
| +158 | Some banks are overrated as fuck | 52 | 2d |
| +143 | Beware all those preparing to recruit for '28 | 41 | 17h |
| +38 | Post-IB Paths (non-buyside) | 9 | 31m |
| +35 | Does making it in IB mean killing your personality? | 11 | 1d |
| +34 | How to be satisfied | 23 | 16h |
| +31 | Any tips for sleeping well? | 10 | 34m |
| +28 | Weird Question: Would you rather your MD be someone you despise, or someone you love? | 3 | 46m |
| +27 | Summer Class is wild | 17 | 11h |
Career Resources
Think a little harder here (hint: time value of money).
See accelerated depreciation as a tax deferral. The company will pay less taxes during the first couple of years and then there will be a reverse effect: they will pay more taxes. Regardless of the depreciation method used, the total amount of depreciation is the same. The only difference between accelerated and straight line is the length of the depreciation period.
Sapiente et mollitia neque voluptates sint. Nulla voluptatem saepe ad nemo sapiente. Dolor sit doloremque architecto. Sint doloribus enim saepe laudantium. Quo nesciunt debitis quaerat pariatur et. Et et voluptates facere quos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...