| Depreciation does affect cash flow indirectly. Using different methods of depreciating an asset will impact the depreciation expense. | ||||||||||
| Even though depreciation expense is non-cash transaction, it indirectly affect cash flow through the income tax effect. Having higher | ||||||||||
| depreciation expense can lower your taxable income, thereby reducing your income tax expense, which will change your cash outflow for | ||||||||||
| taxes. | ||||||||||