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Current Attempt in Progress Pronghorn Corp reported net income of $58,000. Depreciation expense for the year was $126,000. The company calculates depreciation expense using the
Current Attempt in Progress Pronghorn Corp reported net income of $58,000. Depreciation expense for the year was $126,000. The company calculates depreciation expense using the straight-line method, with a useful life of 10 years. Top management would like to switch to a 15-year useful life because depreciation expense would be reduced to $81,000. The CEO says, Increasing the useful life would increase net income and net cash provided by operating activities. Provide a comparative analysis showing net income and net cash provided by operating activities (ignoring other accrual adjustments) using a 10-year and a 15-year useful life. (Ignore income taxes.) 10-year life 15-year life Net income A A Net cash provided by operating activities $
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