Depreciation help in finding out the incremental cash flows
How does depreciation help in finding out the incremental cash flows?
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Depreciation expense is mainly a tax deductible expense and thus affects cash flow by its effect on taxes. Depreciation expense which is incremental to a proposed project consequently affects incremental cash flows.
The discussion of zero-coupon bonds in the text gave an instance of two zero-coupon bonds issued through Commerzbank. The DM300, 000,000 issues due in the year of 1995 sold at 50 percent of face value and the DM300, 000,000 due in the year of 2000 sold a
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