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Suppose that on its historical Income Statements, a firm always split its total depreciation and amortization between the Cost of Goods Sold and SG&A. Thus,

Suppose that on its historical Income Statements, a firm always split its total depreciation and amortization between the Cost of Goods Sold and SG&A. Thus, when we forecast those accounts (namely, CGS and SG&A) we implicitly, and correctly, forecast the firm’s depreciation and amortization. Nonetheless, why must we always separately forecast depreciation and amortization as part of our forecasting model? Be brief!


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