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IMANET CMA Exam - Topic 6 Question 28 Discussion

A depreciation tax shield is?
B) A reduction in income taxes.
A) An after-tax cash outflow
C) The cash provided by recording depreciation.
D) The expense caused by depreciation.

IMANET CMA Exam - Topic 6 Question 28 Discussion

Actual exam question for IMANET's CMA exam
Question #: 28
Topic #: 6
[All CMA Questions]

A depreciation tax shield is?

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Suggested Answer: B

A tax shield is something that will protect income against taxation. Thus, a depreciation tax shield is a reduction in income taxes due to a company's being allowed to deduct depreciation against otherwise taxable income. -


by Danica at May 03, 2022, 12:46 PM

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Edelmira
8 months ago
I thought depreciation was just an expense, not a cash provider!
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Slyvia
9 months ago
Definitely not an after-tax cash outflow, that's misleading.
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Amina
9 months ago
Wait, is it really just about cash flow from depreciation?
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Carlee
9 months ago
Totally agree, it's all about that tax benefit.
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Bettina
9 months ago
It's a reduction in income taxes!
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Kerrie
9 months ago
I recall something about depreciation being an expense, but I don't think that's what the tax shield is about. It might be more about the tax savings.
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Brice
9 months ago
I'm not entirely sure, but I feel like it could also be about tax reductions, so B seems plausible too.
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Bernardo
9 months ago
I remember practicing a question that mentioned cash flow benefits from depreciation, which might point to C.
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Andra
9 months ago
I think the depreciation tax shield is related to how depreciation reduces taxable income, so maybe it's B?
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Derrick
9 months ago
Hmm, this question seems a bit confusing. I'll need to read it carefully and try to break down the key terms and concepts.
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Ronald
9 months ago
I'm a bit confused. Is it really that different from using cp and then rm?
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Donte
9 months ago
Hmm, this self-join question seems tricky. I'll need to think carefully about the key differences between self-joins and regular joins.
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Jamie
10 months ago
I'm a little confused by the terminology in the answer choices. IKEv1 cluster, IKEv2 backup gateway, IKEv2 load balancer - it's a lot to keep track of. I'll need to read through the options carefully and try to match them to what I see in the image.
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