Economics

Customer Question
Please assist with this question #3 i do not understand. Thanks

Brandywine Homecare, a not-for-profit business, had revenues of$12 million in 2007. Expenses other than derogation total 75 percent of revenues, and depreciation outgo was $1.5million. All revenues were dispassionate in cash during the yr and all expenses other than depreciation were paid in cash.

3. chew over the comp each changed itsdepreciation calculation procedures (still in spite of appearance GAAP) such that its depreciation expense doubled. How would this change affectBrandywines make income, total profit margin, and cashflow?
Submitted: 456 old age and 15 hours ago.
Category: Finance
Value: $9
Status: CLOSED
Accepted Answer
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skilled:  John Mark replied 456 days and 15 hours ago.
HI,

Thanks XXXXX a not-for-profit business, had revenues of$12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. 3.



Suppose the company changed itsdepreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affectBrandywines net income, total profit margin, and cashflow?

ORIGINAL kale INCOME
= 12m - 9m - 1.5m = 1.5 m
REVISED NET INCOME
= 12m - 9m - 3m = no income

ORIGINAL PROFIT MARGIN
= 1.5m/12m = 12.5%
REVISED PROFIT MARGIN
= 0m/12m = 0%

There will be no doctor on cashflow as depreciation in non cash expenditure and any increase or decrease in depreciation doesnot impact cash flows or company.,If you want to get a abounding essay, order it on our website: Orderessay



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