Assume a firm has EBAT of $200,000, and no amortization. It is in a 25 percent tax

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Assume a firm has EBAT of $200,000, and no amortization. It is in a 25 percent tax bracket.
a. Compute its cash flow.
b. Assume it has $200,000 in amortization. Recompute its cash flow.
c. How large a cash flow benefit did the amortization provide.

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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Question Posted: Sep 15, 2018 11:43 AM

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Assume a firm has EBAT of $200,000, and no amortization. It is in a 25 percent tax

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a Earnings before amortization and taxes cash flow 200000 Taxes cas...View the full answer

Foundations of Financial Management

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