Which One of the Following Statements Regarding Depreciation Is Correct

Multiple Choice

Which one of the following statements regarding depreciation is correct?

A) The depreciation tax shield adjusts annually with the level of inflation.
B) The real amount of annual depreciation is fixed, thus the higher the rate of inflation, the higher the depreciation tax shield.
C) Tax law allows accelerated depreciation to be used for tax purposes.
D) MACRS can be used for accounting purposes but not for tax purposes.