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a. 9. Which of the following statements is CORRECT? The more depreciation a firm reports, the higher its tax bill, other things held constant b.

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a. 9. Which of the following statements is CORRECT? The more depreciation a firm reports, the higher its tax bill, other things held constant b. People sometimes talk about the firm's cash flow, which is shown as the lowest entry on the income statement, hence it is often called "the bottom line." c. Depreciation reduces a firm's cash balance, so an increase in depreciation would normally lead to a reduction in the firm's cash flow, d. Gross profit margin is a financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold (COG). Depreciation is not a cash charge, so it does not have an effect on a firm's reported profits. e

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