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Author Question: To estimate a firms cash flow from operations, depreciation is added back to net income. Which of ... (Read 123 times)

Darron12

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on: Aug 7, 2023

Question 1

Tibbs Inc. had the following data for the year ended December 31, 2020: Net income = $500; Net operating profit after taxes (NOPAT) = $600; Total assets = $3,400; Short-term investments = $400; Shareholders’ equity = $2,200; Total debt = $1,200; and Total operating capital = $2,800. What was its return on invested capital (ROIC)?

◦

19.96%


◦

20.07%


◦

21.43%


◦

22.39%



Question 2

To estimate a firm’s cash flow from operations, depreciation is added back to net income. Which of the following is true regarding depreciation?

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Depreciation is an extraordinary expense that is not always deducted when calculating net income, and it should not be added back to net income when calculating a firm’s cash flow from operations.


◦

Depreciation is an extraordinary expense that is not always deducted when calculating net income, and it must be added back to net income when calculating a firm’s cash flow from operations.


◦

Depreciation is a noncash expense resulting from the purchase of fixed assets, but it should not be added back to net income when determining a firm’s cash flow from operations.


◦

Depreciation is a noncash expense resulting from the purchase of fixed assets, and it must be added back to net income when determining a firm’s cash flow from operations.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Darron12 on Aug 7, 2023

AarionnaH

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Darron12

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

TheDev123

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Reply 3 on: Yesterday
Wow, this really help

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