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Depreciation is a cash outflow that should be considered when evaluating capital investments. True or false?

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Question ajoutée par Said Shaban , Accountant , Tri State Materials Testing
Date de publication: 2015/08/23
Utilisateur supprimé
par Utilisateur supprimé

False.

 

Depreciation is not a cashflow, it is an accounting concept; it would be considered only in the tax computation of the investment appraisal, from and tax benefit point of view.

Ahmed ElGhossein
par Ahmed ElGhossein , Finance Manager - Group Reporting , Gulf Insurance Group K.S.C.P.

False as it is a non cash expense.

Shah Bux Sawand
par Shah Bux Sawand , Loan Officer , The First Micro Finance Bank Ltd

The given statement is true

 

Badar Khan
par Badar Khan , Accounts cum administrative assistant , Al Qassimia Drivng Training Centre.Sharjah

depreciation should not be considered when evaluating investment because depreciation is irrelevant cost and therefore only relevant cost should be considered..therefore the statement is false..

 

Said Shaban
par Said Shaban , Accountant , Tri State Materials Testing

The answer is false.

Depreciation is NOT a cash flow. Depreciation can be deducted for tax purposes resulting in a tax savings and reducing the cash outflow  for taxes.

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