Mauldin Welding Shop is considering the purchase of new high-tech welding equipment.If the equipment is purchased,Mauldin will incur an additional $8,000 in annual depreciation expense for the next five years.In determining the cash flows associated with the new equipment,the $8,000 of annual depreciation expense will be

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense, so it does not directly affect cash flows. It is used for tax purposes and affects net income, but it is not a cash outflow or inflow.

Mauldin Welding Shop Is Considering the Purchase of New High-Tech