Discuss briefly and comment for accuracy the following statements. “All else equal, higher depreciation expenses will result...

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Finance

Discuss briefly and comment for accuracy the followingstatements.
“All else equal, higher depreciation expenses will result inlarger FCF and lower net income. The specific impact can bediscerned by multiplying the incremental depreciation expense bytax rate.”

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3.9 Ratings (407 Votes)

The given statement is true Higher depreciation will result in larger FCF and lower net income This is due to the fact that Depreciation is a tax deductible expense which is noncash in nature Means it is allowed as deduction while calculating taxable income but it does See Answer

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Discuss briefly and comment for accuracy the following statements. “All else equal, higher depreciation expenses will result...

90.2K

Verified Solution

Question

Finance

Discuss briefly and comment for accuracy the followingstatements.
“All else equal, higher depreciation expenses will result inlarger FCF and lower net income. The specific impact can bediscerned by multiplying the incremental depreciation expense bytax rate.”

Answer & Explanation Solved by verified expert

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Discuss briefly and comment for accuracy the following statements. “All else equal, higher depreciation expenses will result...

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Finance

Discuss briefly and comment for accuracy the followingstatements.“All else equal, higher depreciation expenses will result inlarger FCF and lower net income. The specific impact can bediscerned by multiplying the incremental depreciation expense bytax rate.”

Answer & Explanation Solved by verified expert

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Discuss briefly and comment for accuracy the followingstatements.
“All else equal, higher depreciation expenses will result inlarger FCF and lower net income. The specific impact can bediscerned by multiplying the incremental depreciation expense bytax rate.”