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Author Question: Which of the following identities is TRUE? A) Operating Cash Flow = EBIT + Depreciation - Taxes ... (Read 84 times)

karateprodigy

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on: Jul 10, 2018
Which of the following identities is TRUE?
 
  A) Operating Cash Flow = EBIT + Depreciation - Taxes
  B) Net Capital Spending = Ending Net Fixed Assets - Depreciation
  C) Change in Net Working Capital (NWC) = Current Assets - Current Liabilities
  D) Cash Flow from Assets = Operating Cash Flow + Net Capital Spending

Question 2

Which one of the answers below is NOT one of the three components of the Cash Flow from Assets?
 
  A) Operating Cash Flow
  B) Net Capital Spending
  C) Noncash Expenses
  D) Change in Net Working Capital


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ms_sulzle

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: A
Explanation: A) Net Capital Spending = Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation
Change in Net Working Capital (NWC) = Ending NWC - Beginning NWC
Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in NWC

Answer to Question 2

Answer: C


karateprodigy

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Reply 2 on: Jul 10, 2018
Gracias!

covalentbond

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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