Why is depreciation called the tax shield? How does this impact how cash flows are calculated?

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Corporate Finance

ISBN: 9781265533199

13th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Posted Date: Apr 03, 2024 09:12 PM

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Why is depreciation called the tax shield? How does this impact how cash flows are calculated?

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Depreciation is called a tax shield because it reduces a companys taxable income thereby lowering the amount of taxes owed to the government It acts a... View the full answer

Corporate Finance

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