Cash flow is lost due to the reduced depreciation

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Reference no: EM131579936

Assume a corporation has earnings before depreciation and taxes of $112,000 depreciation of $50,000 and is in a 40 percent tax bracket.

(a) How much would cash flow be if there were only $12,000 in depreciation? All other factors are the same. (Omit the "$" sign in your response.)

Cash flow $

(b) How much cash flow is lost due to the reduced depreciation between $50,000 and $12,000? (Omit the "$" sign in your response.)

Cash flow $

Reference no: EM131579936

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