Quiz Ch 09 – Handling Depreciation Tax Shield in Cash Flow Calculation

Fundamentals of Corporate Finance

Brealey, Myers, and Marcus

10th Edition

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When calculating cash flow, what should the company do with the depreciation tax shield for an investment of $120,000 that can be depreciated for tax purposes straight-line over 6 years at a corporate tax rate of 21%?

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  • Search Terms: a) $, %. (revenues a add adjustment after-tax an be calculating can cash company corporate deduct depreciated depreciation expense. expenses) b) expenses) c) expenses) d) flow: for from investment is it less line made no not of over purposes rate shield should since straight tax the to when year years.
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