Asked by Abigail Kooiker on Jul 08, 2024
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Since depreciation is a noncash charge,it neither appears on,nor has any effect on,the cash budget.
Depreciation
The reduction in the value of an asset over time, due in particular to wear and tear, typically used for tax and accounting purposes.
Noncash Charge
An expense reported in the income statement of a company that does not involve actual cash flow, such as depreciation or amortization.
Cash Budget
A financial plan that estimates cash inflows and outflows over a specific period, used for managing liquidity and ensuring financial stability.
- Assess the impact of depreciation on cash flow and budgeting.
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Learning Objectives
- Assess the impact of depreciation on cash flow and budgeting.
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