Question
Brandywine Clinic, a not-for-profit business, had revenues of $12.9 million last year. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was
Brandywine Clinic, a not-for-profit business, had revenues of $12.9 million last year. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.4 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 change affect Brandywine's cash flow? If cash flow would go down, enter the amount of the change as a negative number. If cash flow would go up, enter the amount of the change as a positive number.
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