07cv1Q29 1. CFAi sample exam Q. assume US GAAP applies unless otherwise noted. All else equal, compared with using the straight-line method of depreciation, using an accelerated of depreciation in the early years of an asset’s life would most likely result in the firms: a. shareholder’s equity. B. asset turnover ratios c. CFO d. CFI answer: a. shareholder’s equity. An accelerated method of depreciation produces greater expenses in the early years and lower net income, which in turn lowers the retained earning, resulting in a decrease in shareholders’ equity. --I think B. asset turnover ratios is also right. An accelerated method of depreciation results lower BV of long-lives asset. Asset turnover ratios become higher.
And the question on this one is what? which is higher or which one is lower?