Which cash flow item calculation will be affected by depreciation expense even though depreciation expense is not a cash flow item itself?
A)initial investment.
B)income taxes.
C)salvage value.
D)release of working capital.

Question

Quizplus · Accepted Answer

Depreciation expense affects income taxes because it reduces taxable income, thereby affecting the cash flow related to taxes.

Which Cash Flow Item Calculation Will Be Affected by Depreciation