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  1. business
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  3. xyz company, a 'for-profit' business, had revenues

XYZ Company, a 'for-profit' business, had revenues of $60 million in 2019. Expenses other than...

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Accounting

XYZ Company, a 'for-profit' business, had revenues of $60 million in 2019. Expenses other than depreciation totaled 55 percent of revenues, and depreciation expense was $5.0 million. XYZ Company, must pay taxes at a rate of 25 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.

Depreciation originally was $5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has $2.5 million in depreciation expense instead of $5 million.

Based on this change in depreciation expense, what would XYZ's cash flow be?

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