All else equal compared to using long average lives and high salvage value for depreciable asset, will using short average lives and low salvage values decrease a company’s total asse turnover cash flow from operation a no no b no yes c yes no d yes yes
This is affecting depreciation expense. So given depreciation expense has no impact whatsoever on the CFO of a company, choices A or C are the only right ones. Now look at TAT TAT = NS/TA TA with High SV, Long Avg Life --> Depreciation would be lower --> so TA would be high so TAT would be lower. With Low SV, Low Life --> Depreciation high, TA lower, TAT High So answer A. Will not decrease TAT or CFO.
it’s all about depreciation, baby. gotta love it