ECONOMICS

Detailed explanation-1: -There are a few reasons why accelerated depreciation is good. First, it allows businesses to write off the cost of new assets more quickly, which can improve cash flow. Second, it can incentivize businesses to invest in new capital equipment and machinery, which can boost productivity.

Detailed explanation-2: -What is accelerated depreciation? Accelerated depreciation is the set of IRS rules that allow businesses to deduct from their taxable income the declining value of business-related investments, such as equipment and machinery, faster than the value of those assets actually declines.

Detailed explanation-3: -The primary advantage to using accelerated rather than straight-line depreciation is that with accelerated depreciation the present value of the tax savings provided by depreciation will be higher, other things held constant.

Detailed explanation-4: -The DDB method records larger depreciation expenses during the earlier years of an asset’s useful life, and smaller ones in later years.