Suppose a corporation has earnings before depreciation and taxes of $103,000, depreciation of $41,000, and has a tax bracket of 40 percent.

a.	Calculate your cash flow using the following format. (Enter all responses as positive values.)

Earnings before depreciation and taxes	ps
Depreciation
earnings before taxes	ps
Taxes
profit after tax	ps
Depreciation
Cash flow	ps

b.	How much would the cash flow be if there were only $15,000 in depreciation? All other factors are the same.

Cash flow

ps

C.	How much cash flow is lost due to the reduction in depreciation from $41,000 to $15,000?

loss of cash flow

ps