Question: Problem 1 2 - 3 ( Algo ) Cash flow [ LO 1 2 - 2 ] Assume a firm has earnings before depreciation and

Problem 12-3(Algo) Cash flow [LO12-2]
Assume a firm has earnings before depreciation and taxes of
$700,000 and no depreciation. It is in a 35 percent tax bracket.
a. Compute its cash flow.
Cash flow
b. Assume it has $700,000 in depreciation. Recompute its cash flow.
Cash flow
c. How large a cash flow benefit did the depreciation provide?
Benefit in cash flow
Problem 12-3(Algo) Cash flow [LO12-2] Assume a firm has earnings before

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