Brandywine Homecare, a not-for-profit business, had revenues of $12 .pdf

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Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expensesother than depreciation totaled 75% of revenues, and depreciation expense was $1.5 million. Allrevenues were collected in cash during the year and all expenses other that depreciation werepaid in cash. a. Construct Brandywine\'s 2011 income statement. b. What were Brandywine\'s netincome, total profit margin, and cash flow? c. Now, suppose the company changed itsdepreciation calculation procedures (still within GAAP) such that its depreciation expensedoubled. How would this change affect Brandywine\'s net income, total profit margin and cashflow? d. Suppose the change had halved, rather than doubled, the firm\'s depreciation expense.Now, what would be the impact on net income, total profit margin and cash flow?Solution
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