A Company Can Increase Its Net Cash Flow by Increasing

question 103

True/False

A company can increase its net cash flow by increasing the depreciation expense it records during the period.

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Definitions:

Tax Depreciation

The method by which a business writes off the cost of a tangible asset over its useful life for tax purposes.

Book Depreciation

The allocation of the cost of a tangible asset over its useful life for accounting and tax purposes.

Tax Rate

The percentage at which an individual or corporation is taxed, or the government's claim on earnings.

Income Tax Expense

The amount of income taxes a company expects to pay for the current tax year, accounting for deferred taxes.