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 rse. II. If depreciation were halved, taxable income and taxes would decline but net cash flow would rise. 1II. If depreciation were halved, taxable income, taxes, and net IV. If depreciation h cash flow would all decine. on were halved, taxable income and net cash flow would rise but taxes would fal were halved, taxable income and taxes would rise but net cash flow would fail. swere your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why? Select- I. You should prefer to have lower depreciation charges and therefore and, therefore, cash flows should be more important to them than net income II. You should prefer to have higher depreciation charges and t higher cash flows. Net cash flows are the funds that are available to the owners to withdraw from the firm s the firm and, therefore, net income should be more impoirtant to them than net cash flows. III. You should prefer to have lower dep the firm and, therefore, net income should be more importants to them than net cash nows herefore higher net income. Net income represents the funds that are available to the owners to withdraw from preciation charges and therefore higher net income. Net income represents the funds that are available to the owners to withdraw from Net cash flows are the funds that are avaiable to the owners to withdraw from the ou should prefer to have higher depreciation charges and therefore higher net income firm and, therefore, cash flows shouild be more important to them than net income. V. You should prefer to have higher depreciation charges and therefore higher cash flows. Net cash flows are the funds that are available to the owners to withdraw from the firm and, therefore, cash flows should be more impoirtant to them than net income