Bath Works Company has $70,000 of depreciation expense and is subject to a 30% income tax rate.On an after-tax basis,depreciation results in a:

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Depreciation is a non-cash expense, but it provides a tax shield. The tax shield is calculated as the depreciation expense multiplied by the tax rate: $70,000 * 30% = $21,000. This results in a $21,000 inflow due to the tax savings.

Bath Works Company Has $70,000 of Depreciation Expense and Is