Effects of Depreciation on Profit and Cash Flows

Essay

Effects of depreciation on profit and cash flows
In its financial statements, Flysafe Airlines has for many years depreciated its aircraft over an estimated useful life of 12 years. In preparing this year's financial statements, management decided to revise the estimate from 12 years to 15. Briefly explain how this revision in estimated life is likely to affect this year's:
(a) Profit.
(b) Net cash flow.
(c) Taxable income.