Analyze the tax cash flow from depreciation


Response to the following questions:

1. If a firm replaces its production line with equipment with lower depreciation expenses, will the tax cash flow from depreciation be an inflow or an outflow? Explain.

2. Depreciation does not involve a cash flow, yet we consider cash flows from the depreciation tax shield. What is the depreciation tax shield and how does it produce a cash flow?

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Financial Accounting: Analyze the tax cash flow from depreciation
Reference No:- TGS02107314

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