Question
Brandywine Clinic, a not-for-profit business, had revenues of $12.1 million last year. Expenses other than depreciation totaled 77 percent of revenues, and depreciation expense was
Brandywine Clinic, a not-for-profit business, had revenues of $12.1 million last year. Expenses other than depreciation totaled 77 percent of revenues, and depreciation expense was $1.9 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 was halved. How would this change affect Brandywine's profit margin? If profit margin would go down, enter the amount of the change as a negative number. If profit margin would go up, enter the amount of the change as a positive number.
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