Discuss IMANET CMA Exam Topic 6 Question 28

A depreciation tax shield is?

AAn after-tax cash outflow

BA reduction in income taxes.

CThe cash provided by recording depreciation.

DThe expense caused by depreciation.

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. -

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13 comments · newest first

Edelmira 11 months ago

I thought depreciation was just an expense, not a cash provider!

Slyvia 12 months ago

Definitely not an after-tax cash outflow, that's misleading.

Amina 12 months ago

Wait, is it really just about cash flow from depreciation?

Carlee 12 months ago

Totally agree, it's all about that tax benefit.

Bettina 1 year ago

It's a reduction in income taxes!

Kerrie 1 year 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.

Brice 1 year ago

I'm not entirely sure, but I feel like it could also be about tax reductions, so B seems plausible too.

Bernardo 1 year ago

I remember practicing a question that mentioned cash flow benefits from depreciation, which might point to C.

Andra 1 year ago

I think the depreciation tax shield is related to how depreciation reduces taxable income, so maybe it's B?

Derrick 1 year 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.

Ronald 1 year ago

I'm a bit confused. Is it really that different from using cp and then rm?

Donte 1 year ago

Hmm, this self-join question seems tricky. I'll need to think carefully about the key differences between self-joins and regular joins.

Jamie 1 year 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.

IMANET CMA Exam - Topic 6 Question 28 Discussion