medium · Investment Banking accounting
A company decides to write down its inventory by $50M. Assuming a 25% corporate tax rate, what is the impact on the Cash Flow Statement?
- Net income decreases by $50M, and cash decreases by $50M
- There is no impact on cash because it is a non-cash write-down
- Cash decreases by $37.5M
- Net income decreases by $37.5M, but cash increases by $12.5M
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