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Assume a 100 increase in the depreciation expense. Indicate the effect on this years Free Cash Flow to Equity (FCFE) if the tax rate is

Assume a 100 increase in the depreciation expense. Indicate the effect on this years Free Cash Flow to Equity (FCFE) if the tax rate is 40% and all the other variables, including the capital expenditures, remain constant. Explain your answer.

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