Why is depreciation good?
Depreciation is good because it allows companies to write something off as a loss. If a company has a piece of equipment that costed $5,000 an can depreciate over a five year period, the company can write off a $1,000 loss every year for five years. Therefore, if a company makes 10,000 dollars a year and is allowed to have a depreciation expense of $1,000 then they only get taxed on $9,000.
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