mpany's at was the the following condensed in constatements for the current year and next year Current Year Next Year Earings before Depreciation & Taxes $550.000 S600.000 50,000 Earnings Before Taxes Tas (40) 5500,000 200,000 S590.000 220.000 $330.000 Mer income $300.000 Cash Flow (net income + depreciation) 350,00 2.80,000 Because depreciation is Butch's only non-cash expense, assume net cash how can be estimated by adding depreciation to net income. Compute the proyected cash flow for the current Year and Next Year. b. Butch has the possibility to switch to accelerated depreciation. This would change the current year depreciation to $80.000 and next year's depreciation to $20,000. The total depreciation for the two years does not change ($100.000). What would be the new expected net income and cash flow for the current year and next year? c. As a financial consultant to Butch, do you recommend the current straight-line depreciation or the proposed accelerated depreciation? Why? BUTCHI Butch's projects the following condensed income statements for the current year and next year: Current Year Next Year Earnings before Depreciation & Taxes $550.000 $600,000 Depreciation 50.000 50,000 Earnings Before Taxes $500,000 $550,000 Taxes (40%) 200.000 220,000 Net Income $300.000 $330,000 Cash Flow (net income + depreciation) 35,00 180,000 a. Because depreciation is Butch's only non-cash expense, assume net cash flow can be estimated by adding depreciation to net income. Compute the projected cash flow for the Current Year and Next Year. b. Butch has the possibility to switch to accelerated depreciation. This would change the current year depreciation to $80,000 and next year's depreciation to $20,000. The total depreciation for the two years does not change ($100.000). What would be the new expected net income and cash flow for the current year and next year? c. As a financial consultant to Butch, do you recommend the current straight-line depreciation or the proposed accelerated depreciation? Why