Why is accelerated depreciation important for lessors?

Accelerated depreciation is a significant advantage for lessors because it enables them to recover the costs of the asset more quickly for tax reporting purposes. This method allows lessors to write off a larger portion of the asset's cost in the earlier years of the asset's life, providing immediate tax relief. This is particularly beneficial when the asset generates income, as it allows lessors to offset that income against the depreciation expense, thereby reducing their overall taxable income in those initial years.

This tax strategy can enhance cash flow for lessors, making leasing more appealing and financially viable, which ultimately can lead to more competitive leasing terms or rates. By recovering their investments more rapidly, lessors can reinvest that capital into new assets or other ventures sooner than they could with a straight-line depreciation approach, which spreads the expense evenly over the asset's useful life.

In contrast, the other choices do not accurately reflect the primary benefits of accelerated depreciation for lessors. For example, while it might influence resale values and lease payment structures, those aspects are more indirect outcomes rather than the central advantage of this tax method.