Why is equipment depreciation relevant to financial planning?

California C-36 exam practice question · Business Finances

Why is equipment depreciation relevant to financial planning?

AIt creates cash in the bank
It allocates cost over time
CIt eliminates maintenance
DIt changes employee hours

Why B is correct

Depreciation is an accounting allocation rather than a cash receipt. Understanding it helps measure job cost and profitability while management separately plans cash for future replacement.

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Why is equipment depreciation relevant to financial planning?

Why is equipment depreciation relevant to financial planning?

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