Which statement about net cash flow is true?
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The firm’s net cash flow is often called “the bottom line” since it is the lowest entry on the income statement.
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Depreciation reduces a firm’s asset balance, so an increase in depreciation would normally lead to a decrease in the firm’s net cash flow.
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Net Cash Flow = Net Income – Depreciation and Amortization Charges.
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Net Cash Flow = Net Income + Noncash Charges – Noncash Revenues.