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The interest and depreciation deductions on an investment property are equal. The interest equals one...

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Question

Accounting

The interest and depreciation deductions on an investment property are equal. The interest equals one half of the NOI. [Recall that Taxable income = NOI Interest Depreciation] An increase in the interest rate, holding everything else constant, will:

Group of answer choices

a. cause the CFAT to be less than the CFBT

b. Allow a tax shelter equal to the dollar increase in the interest paid

c. Cause an increase in the taxes due

d. Cause an increase in the depreciation allowance, given the interest parity rule

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