In order to convert the average annual net cash inflow from the asset back to the average annual operating income from the asset, one must ( )
A: subtract annual depreciation expense
B: add annual depreciation expense
C: multiply by annual depreciation expense
D: divide by annual depreciation expense
A: subtract annual depreciation expense
B: add annual depreciation expense
C: multiply by annual depreciation expense
D: divide by annual depreciation expense
举一反三
- Depreciation expense reduces operating income but does not require the use of cash.
- Which of the following statements regarding depreciation expense in the cash flow statements is TRUE Depreciation is: A: added back to net income when determining CFO using the direct method. B: added back to net income when determining CFO using the indirect method. C: considered a cash item.
- Total depreciation expense over an asset's useful life will not be identical under all methods of depreciation.
- The units-of-production method of depreciation charges a constant amount of expense for each period of an asset's useful life.
- Which of the following items is included in the adjustment of net income to obtain cash flow from operating activities? ( ) A: Depreciation expense for the period. B: dividend C: The amount by which equity income recognized exceeds cash received. D: The change in deferred taxes.