Which of the following expenses for accounting purposes generates an indirect after-tax cash inflow for purposes of net present value computations?

Question

Quizplus · Accepted Answer

Depreciation expense generates an indirect after-tax cash inflow because it reduces the company's taxable income, which in turn reduces the amount of taxes the company must pay. The tax savings from the lower taxable income are essentially an after-tax cash inflow. Repairs, salaries, and tax expense all generate direct cash outflows and do not generate indirect after-tax cash inflows.

Which of the Following Expenses for Accounting Purposes Generates an Indirect