medium · Private Equity
Under US GAAP, how does an increase in depreciation of $10M affect the three financial statements (assuming a 25% tax rate)?
- Net income down $10M; Cash up $10M; Assets unchanged.
- Net income down $7.5M; Cash down $7.5M; Equity down $7.5M.
- Net income down $10M; Cash up $2.5M; Liabilities up $2.5M.
- Net income down $7.5M; Cash up $2.5M; Assets down $7.5M.
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