Which methods would Little Town prefer to use for income tax purposes?

Final Examination Mba 503. Business & Finance Homework Help| Business & Finance homework help

Little Town would prefer to use the double-declining-balance method for income tax purposes. The double-declining balance method speeds up depreciation deductions and allows businesses to claim larger deductions during the initial years of ownership.

This method, in other words allows companies to reduce their taxable income faster than other methods and lower taxes.

This method also allows for quick cash infusions, which could be used to pay debt more quickly or fund investment projects.

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