Can somenone explain in more detail why higher than expected inflation reduces real tax
savings from depreciation?
Thank you!作者: neil1234 时间: 2011-7-11 19:09
your depreciation expense is understated. (since you are depreciating at your historic acquisition cost, but the actual cost of equipment today, and hence depreciation expense would be higher bcos of inflation).
since the depreciation is understated - your tax savings are lower.
