Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 21 - Capital Budgeting and Cost Analysis - Assignment Material - Questions - Page 830: 21-8

Answer

No, I don't agree. Discounted cash flow methods do not ignore depreciation. Depreciation is considered when calculating cash flows because it affects the taxable income, which in turn influences the cash flows. Depreciation is an integral part of the DCF analysis as it impacts the project's financial performance and taxation.

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