Since depreciation and other noncash charges represent a scheduled write-off of an earlier cash outflow,they should not be included in the cash budget,though depreciation charges will affect the taxes that a firm pays.

Question

Quizplus · Accepted Answer

Depreciation and other noncash charges do not involve actual cash outflows, therefore they should not be included in the cash budget. However, they will affect the taxes that a company pays since these charges are deducted from taxable income.

Since Depreciation and Other Noncash Charges Represent a Scheduled Write-Off