Question
Brandywine clinic, a not for profit business, had revenues of $12 million in 2012. Expenses other than depreciation totaled 75 percent of revenues, and depreciation
Brandywine clinic, a not for profit business, had revenues of $12 million in 2012. Expenses other than depreciation totaled 75 percent 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.A. Construct brandywines 2012 income statement.B. What were brandywines net income, total profit margin, and cash flow?C. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that it's depreciation expense doubled. How would this change affect brandywines net income, total profit margin and cash flow?D. Suppose the change had halved, rather than doubled, the firms depreciation expense. Now, what would be the impact on net income, tots profit margin, and cash flow?
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