What Are the Two Indirect Cash Flow Effects of Inflation

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Examlex · Accepted Answer

The Answer is 1.Companies suffer a loss on their depreciation tax shields if depreciation charges cannot be inflation-adjusted for tax purposes.2.Most companies cannot pass on to their customers the whole of any cost increases arising from inflation without losing sales volume.As a result,they fail to maintain profitability in real terms.

What Are the Two Indirect Cash Flow Effects of Inflation

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