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Assume a firm has earnings before depreciation and taxes of $550,000 and no depreciation. It is...

Assume a firm has earnings before depreciation and taxes of $550,000 and no depreciation. It is in a 40 percent tax bracket.


a. Compute its cash flow.
  



b. Assume it has $550,000 in depreciation. Recompute its cash flow.
  



c. How large a cash flow benefit did the depreciation provide?
  

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