Question

How much cash does a company pay on depreciation in a given year?

Answer 1

Zero, Depreciation is a non-cash expenditure and hence no cash is paid for depreciation in any year.

When a cash flow is prepared by indirect method, depreciation is added to profit of the company to calculated cash generated by operations or excluded from cash flow in case cash flow is prepared by direct method.

Basically when an asset is purchased then it is always known that asset will be used for many years. For the purpose of matching principle the cost of asset is distributed to whole life of asset in the form of depreciation.

Conclusion

Any Company pays nil amount for Depreciation in any year.