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Finance

Problem:

Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 40 percent tax bracket.

Required:

Question 1: Compute its cash flow.

Question 2: Assume it has $200,000 in depreciation. Recompute cash flow.

Question 3: How large a cash flow benefit did the depreciation provide.

Note: Explain all calculation and formulas.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163503

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