Accelerated depreciation refers to any depreciation method that produces greater deductions for depreciation in the early years of an asset's life. One benefit of using accelerated depreciation is that more expenses are incurred in the early years resulting in less taxable income, helping to save on taxes in the early years. Since depreciation expenses are non-cash expenses and taxes are an actual cash outlay, a company can achieve greater cash flow in early years by using accelerated depreciation.
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