What is depreciation and amortization

Assignment Help Finance Basics
Reference no: EM133002830

What is depreciation and amortization? What's the difference? It is an accounting concept that has an indirect impact on cash flow as it is deductible for tax purposes and lowers the overall amount of taxes paid for that period. Therefore, it does impact or lower cash outflows for taxes. That is called the tax shield of depreciation and amortization.

Over the course of my career, companies have increased their percentage of intangible property that must be amortized. Now, it is very common where companies will have little property, plant and equipment, but lots of intangible property. Why?

Reference no: EM133002830

Questions Cloud

What is new semiannual interest? payment : A ?$1,000 Treasury? inflation-protected security is currently selling for ?$900 and carries a coupon interest rate of 3.42 percent.
Single index model over using markowitz portfolio theory : Explain the advantages of the using the Single Index Model over using Markowitz Portfolio Theory when investing in a broad market
Npv of project based on nominal prices and nominal rate : An investment of $8,000 is expected to generate cash inflows of $1,500 per year for 8 years measured at today's price levels. The annual inflation rate over the
What is the trend in cash flow from operating activities : Identify at least one reason for the increase/decrease in each of the three categories of the cash flow statement. Explain your answer.
What is depreciation and amortization : What is depreciation and amortization? What's the difference? It is an accounting concept that has an indirect impact on cash flow as it is deductible for tax p
Prices of high-coupon bonds change : Bond prices and yields Construct some simple examples to illustrate your answers to the following:
How much of the profits estimated for the year : Which of the three categories in the cash flow statement has contributed majorly to the decrease in the 'change in cash' by the company from 2003 to 2006(E)?
Identify the different types of yield curves : Identify the different types of yield curves, and explain what they indicate for the U.S economy. What is the current shape of the yield curve, and why is it sh
Formulas from the replicating portfolio method : Prove that you get the same price of an option when using the formulas from the risk-neutral pricing method as when using the formulas from the replicating port

Reviews

Write a Review

Finance Basics Questions & Answers

  Net present value of the investment in the furnace

What is the net present value of the investment in the furnace? (round to nearest whole dollar)

  The maximum number of shares you can buy

Carson Corporation stock sells for $77 per share, and you've decided to purchase as many shares as you possibly can. You have $43,000 available to invest. What is the maximum number of shares you can buy if the initial margin is 60 percent?

  Should you buy or lease the car

Should you buy or lease the car? What breakeven resale price in three years would make you indifferent between buying and leasing?

  Discuss three reasons for adding international securities

Identify and briefly discuss three reasons for adding international securities to the pension portfolio and three problems associated with such an approach.

  Assume you have 10000 in the bank now and you will deposit

assume you have 10000 in the bank now and you will deposit and additional 5000 a year for the next 20 years as a

  Manufacture an effective vaccine against hiv

The ability to understand evolution is important in being able to understand specific current biological events. Discuss two of the three items

  Given the common dividends per share as 025 and the

given the common dividends per share as 0.25 and the earnings per share as 1.26 calculate the dividend-payout

  What must the cost of capital be

The owner of a number of gas stations is considering installing coffee machines in his gas stations. It will cost $270,000 to install the coffee machines.

  The video gaming industry began modestly

The video gaming industry began modestly with the debut of Pac-Man, Asteroids, and Donkey Kong. These games appeared in arcades where teens gathered to drop quarter after quarter for high score bragging rights. In the home video game market, Atari re..

  Parenthesis q right parenthesis equals

Find the marginal revenue for the given production levels? (values of? q). (Hint: Solve the demand equation for p and use Upper R

  How much should susan invest today

The interest rate is 6% compounded semi-annually, and the first award is made one year from today. How much should Susan invest today?

  What is builtrites taxable income

Management paid a $500,000 common stock dividend and a $180,000 preferred stock dividend Builtrite also received $150,000 in dividend income.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd