Although depreciation does not provide cash to the firm directly, the fact that it is tax-deductible can provide cash inflow to the company.

Name: Although depreciation does not provide cash to the firm directly, the fact that it is tax-deductible can provide cash inflow to the company.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation is tax-deductible, which means it can decrease the taxable income of the company and, as a result, reduce the taxes paid. This can provide cash inflow to the company as it will have to pay lesser taxes.

Although Depreciation Does Not Provide Cash to the Firm Directly