Problem
The Moore Enterprise has gross profit of $960,000 with amortization expense of $400,000. The Kipling Corporation has $960,000 in gross profits but only $64,000 in amortization expense. The selling and administration expenses are $124,000; the same for each company.
If the tax rate is 30 percent, calculate the cash flow for each company.
Calculate the difference in cash flow between the two firms?