Assume a project has earnings before depreciation and taxes of $15,000, depreciation of $25,000, and that the firm has a 25% combined tax bracket. What are the after-tax cash flows for the project?

A) A positive $17,500
B) A positive $19,000
C) A loss of $21,000
D) A positive $28,000


A) A positive $17,500



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When using the allowance method, what are the effects on the accounting equation when a company writes off a bad debt?

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