Assume a corporation has earnings before depreciation and taxes of $114,000, depreciation of $42,000, and that it has a 35 percent tax bracket.

a. Compute its cash flow using the following format. (Input all answers as positive values.) Earnings before depreciation and taxes: Depreciation:

Earnings before taxes:

Taxes:

Earnings after taxes: Depreciation:

Cash flow:

b. How much would cash flow be if there were only $16,000 in depreciation? All other factors are the same.

c. How much cash flow is lost due to the reduced depreciation from $42,000 to $16,000?