The Modified Accelerated Cost Recovery System (MACRS)is Often Used by Companies

Multiple Choice

The Modified Accelerated Cost Recovery System (MACRS) is often used by companies to calculate depreciation expense for tax purposes. Which of the following is most correct?

A) MACRS allows greater tax deductions related to depreciation earlier in the life of an asset than straight line depreciation does.
B) MACRS uses the half-year convention in calculating depreciation expense.
C) MACRS always depreciates the value of an asset down to zero (as opposed to a salvage value) if the asset is held long enough by the company.
D) Even though depreciation is a non-cash expense, the use of MACRS can improve the profitability of a project as compared to the same project using straight line depreciation.
E) All of the above are correct.