c. Now suppose that Congress changed the tax law such that, instead of doubling Berndt's depreciation, it was reduced it by 50%. How would profit and net cash flow be affected? I. If depreciation were halved, taxable income, taxes, and net cash flow would all decline. II. If depreciation were halved, taxable income and net cash flow would rise but taxes would fall. IIf. If depreciation were halved, taxable income and taxes would rise but net cash flow would fall, IV. If depreciation were halved, taxable income, taxes, and net cash flow would all rise. V. If depreciation were halved, taxable income and taxes would decline but net cash flow would rise. d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why? I. You should prefer to have higher depreciation charges and therefore higher net income, Net income represents the funds that are available to the owners to withdraw from the firm and, therefore, net income should be more important to them than net cash flows. II. You should prefer to have lower depreciation charges and therefore higher net income. Net income represerits the funds that are available to the owners to withdraw from the firm and, therefore, net income should be more important to them than net cash flows. III. You should prefer to have higher depreciation charges and therefore higher net income. Net cash flows are the funds that are available to the owners to withdraw from the firm and, therefore, cash flows should be more important to them than net income. IV. You should prefer to have higher depreciation charges and therefore higher cash flows. Net cash flows are the funds that are avaliable to the owners to withdraw from the firm and, therefore, cash flows should be more important to them than net income. V. You should prefer to have lower depreciation charges and therefore higher cash flows. Net cash flows are the funds that are avallable to the owners to withdraw from the firm and, therefore, cash flows should be more important to them than net income