How large a cash flow benefit did the depreciation provide

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Assume a firm has earnings before depreciation and taxes of $640,000 and no depreciation. It is in a 35 percent tax bracket.

Problem a. Compute its cash flow.

Problem b. Assume it has $640,000 in depreciation. Recompute its cash flow.

Problem c. How large a cash flow benefit did the depreciation provide?

Reference no: EM132821167

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