Problem:
Brandywine Homecare, a not-for-profit business, had revenues of 12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was 1.5 million. All revenues collected in cash during the year and all expenses other than depreciation were paid in cash.
Suppose the change had halved, rather than doubled, the firm's depreciation expense. Now, what would be the impact on net income, total profit margin, and cash flow?