P$-21$: Depreciation and cash flow $($LO$5)$ The Rogers Corporation has a gross profit of $$880,000$ and $$360,000$ in depreciation expense. The Evans Corporation also has $$880,000$ in gross profit, with $$60,000$ in depreciation expense. Selling and administrative expense is $$120,000$ for each company.

Given that the tax rate is $40$ percent, compute the cash flow for both companies. Explain the difference in cash flow between the two firms.

Given:

Gross Profit Depreciation Sel$\frac{l}{\text{\&}}$Admin

$a$

Tax Rate: $,0\mathrm{.}4$

c$)$