Question
Cash flow. Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 40 percent tax bracket. a
Cash flow. Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 40 percent tax bracket.
a. Compute its cash flow (5 Points)
b. Assume it has $200,000 in depreciation. Recompute cash flow (5 Points)
c. How large a cash flow benefit did the depreciation provide (5 Points)
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Financial Modeling
Authors: Simon Benninga, Tal Mofkadi
5th Edition
0262046423, 9780253337825
