Depreciation is not only a representation of the loss in asset-value over time.It is also a strategic tool for … management and can be used to minimize tax payments.In this paper we derive the depreciation scheme that minimizes the expected … value of the present value of future tax payments for two types of constraints on the depreciation method. …

This paper focuses on the choice of a depreciation method, when trying to minimize the expected value of the present … tax brackets, we determine the optimal choice between the straight line depreciation method and a speci c accelerated … depreciation method. We show how the distributions of the cash- ows, the discount rate, and the tax structure can in uence the …