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Companies X and Y are very similar. Both have sales of $5,000,000, and COGS are 65% of sales. Both companies have operating expense of $700,000
Companies X and Y are very similar. Both have sales of $5,000,000, and COGS are 65% of sales. Both companies have operating expense of $700,000 and are taxed at 26%. However, X and Y will be claiming $60,000 and $120,000 each respectively in depreciation expense. Calculate each companys net cash flow, and explain specifically the difference in the cash flows.
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