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Assume an all-equity firm has positive net earnings. The operating cash flow of this firm: is unaffected by the depreciation expense. ignores both depreciation and

Assume an all-equity firm has positive net earnings. The operating cash flow of this firm:

is unaffected by the depreciation expense.

ignores both depreciation and taxes.

is equal to net income minus depreciation.

increases when the tax rate decreases.

must be negative.

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