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Subject: FINANCIAL MANAGEMENT CAPITAL BUDGETING On an income statement, cash expenses and depreciation expenses are added together and deducted from revenues to determine net income.
Subject: FINANCIAL MANAGEMENT
CAPITAL BUDGETING
On an income statement, cash expenses and depreciation expenses are added together and deducted from revenues to determine net income.
Assume that a company has cash operating expenses of P500,000 and depreciation expenses of P200,000. Can these amounts be added together and treated as one in a capital budgeting analysis, or should they be kept separate? Why? Assume a tax rate of 30%.
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