How much cash flow is lost due to the reduced depreciation

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Reference no: EM131793660

Question: Assume a corporation has earnings before depreciation and taxes of $104,000, depreciation of $42,000, and that it has a 30 percent tax bracket.

a. Compute its cash flow using the following format. (Input all answers as positive values.)

b. How much would cash flow be if there were only $16,000 in depreciation? All other factors are the same.

c. How much cash flow is lost due to the reduced depreciation from $42,000 to $16,000?

Reference no: EM131793660

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