Answered step by step
Verified Expert Solution
Question
1 Approved Answer
bradywine hospital, a not-for-profit business, had revenues of $12 million in 2004. Expenses other than depreciation totaled 75% of revenues, and depreciation expense was $1.5
bradywine hospital, a not-for-profit business, had revenues of $12 million in 2004. Expenses other than depreciation totaled 75% of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses, other than depreciation, were paid in cash. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this affect Brandywine's net income, total profit margin, and cash flows? it would not change anything it would double everything net income would be 0, Profit would be 0, cash flow would be $3 million net income would be $3 million, profit would be 25% and cash flow would be zero
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started