Suppose a corporation can change its depreciation method so that its tax payments will decrease by $5,000 this year but increase by $5,000 next year. Given this change indepreciation method, what do you expect to happen to the value of this company?O The change will decrease the value of the company because investors don't like changes in accounting methods.O The change will increase the value of the company because the value of the cash savings this year exceeds the cost of the cash payments next year.O The change will have no impact on the value of the company because its cash flow over time will be the same.The change will decrease the value of the company because lower tax payments this year result from lower reported income.

Depreciation:Reducing the value of the tangible asset due to its wear and tear over its useful life…

Answered: ill decrease by $5,000 this year b

Business

Accounting

ill decrease by $5,000 this year b

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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