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Your friend is the accountant for Jackrabbit Inc., a computerserver startup company. The friend...

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Accounting

Your friend is the accountant for Jackrabbit Inc., a computerserver startup company. The friend asks you if accelerateddepreciation would help Jackrabbit reduce the tax liability on arecent hardware purchase. What are some advantages of accelerateddepreciation as compared to a straight-line method, and whichmethod would benefit a startup company like Jackrabbit?

Please provide a detailed answer. Thanks in advance.

Answer & Explanation Solved by verified expert
3.8 Ratings (382 Votes)
Accelerated depreciation is the allocation of a plant assets cost in a faster manner than the straight line depreciation Compared to straight line depreciation accelerated depreciation will mean 1 more depreciation in the earlier years of an assets    See Answer
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In: AccountingYour friend is the accountant for Jackrabbit Inc., a computerserver startup company. The friend asks...Your friend is the accountant for Jackrabbit Inc., a computerserver startup company. The friend asks you if accelerateddepreciation would help Jackrabbit reduce the tax liability on arecent hardware purchase. What are some advantages of accelerateddepreciation as compared to a straight-line method, and whichmethod would benefit a startup company like Jackrabbit?Please provide a detailed answer. Thanks in advance.

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