Assume a corporation has earnings before depreciation and taxes of $112,000, depreciation of $50,000, and that it has a 40 percent tax bracket.

a. Compute its cash flow using the following format. (Input all answers as positive values.)

Earnings before depreciation and taxes $112,000

Depreciation 50,00

Earnings before taxes 62,000

Taxes 24,800

Earnings after taxes 37,200

Depreciation 50,000

Cash Flow 87,200

Assume a corporation has earnings before depreciation and taxes of $112,000, depreciation of $50,000, and that it has a 40 percent tax bracket.

a. Compute its cash flow using the following format. (Input all answers as positive values.)

c. How much cash flow is lost due to the reduced depreciation from $50,000 to $12,000?

b. How much would cash flow be if there were only $12,000 in depreciation? All other factors are the same.

c. How much cash flow is lost due to the reduced depreciation from $50,000 to $12,000?