If a firm pays taxes, which one of these will reduce net income but increase cash flow?

Name: If a firm pays taxes, which one of these will reduce net income but increase cash flow?
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Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it is still deductible on a firm's tax return, which can reduce its taxable income and therefore its income taxes. This reduction in taxes will increase the firm's cash flow.

If a Firm Pays Taxes, Which One of These Will