One of the basic techniques used in evaluating after-tax operating cash flows is to Select one: a. add cash expenses to net income. b. subtract depreciation from net income. c. add noncash charges to net income. d. subtract retained earnings from net income.

Q: Explain how depreciation expense is reported in the Statement of Cash Flows using the indirect…

A: Definition: Statement of cash flows: Statement of cash flow is a financial statement that shows the…

Q: In the calculation of cash flow from operating activities, the loss on the disposal of noncurrent…

A: When the company dispose any asset with a proceeds amount less than the book value of the asset ,…

Q: When the indirect method is used to determine the net cash provided by operating activities, the…

A: Loss on the sale of the non-current assets is a non-cash expense. It decreases the net income but…

Q: Explain why depreciation expense, depletion expense, and amortization expense are added to net…

A: Operating Activities: Operating activities refer to those daily activities of the company involved…

Q: If a business decides to switch from the indirect method to the direct method for reporting cash…

A: Cash Flows Statement - Cash Flow Statement shows the movement of Cash in the company for the…

Q: Justification for adding depreciation expenditures to net income in the operating activities portion…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: reason that depreciation is a source of cash inflow is because

A: Any fixed asset purchased has a fixed life throughout which it has to be used. Over the course of…

Q: Under the principle of cashflow estimation, why it is important that cashflow should be measured on…

A: A cash flow statement determines the net cash inflows and outflows from an organization during a…

Q: Depreciation is incorporated in cash flows because it:  A. Is unavoidable cost B. Is a cash…

A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…

Q: Using the indirect technique, depreciation expenses are subtracted from net income before…

A: The indirect (addback) method begins by calculating net income on an accrual basis. Non-cash…

Q: Assume depreciation is calculated on a straight-line basis for tax purposes. Assume all cash flows…

A: 1a) Net Present Value =Sum of the present value of cash inflows-Present value of cash outflows.…

Q: Explain why, when utilizing the indirect method, depreciation expenditure, depletion expense, and…

A: Here is the Answer

Q: Explain how did it get the value of depreciation, income taxation, NOPAT, and after-tax cash flow in…

A: Capital budgeting is the process through which various investments and capital projects are…

Q: Explain why depreciation, depletion, and amortization cost in the operational activities part of the…

A: The Answer

Q: Why do we exclude depreciation expense and the gain or loss on sale of an asset from the operating…

A: Operating activities are the activities that are related to the ongoing business of an individual or…

Q: Which of the following statements about the statement of cash flows is correct?   Question 277…

A: Solution: "The direct method is more consistent with the primary purpose of the statement of cash…

Q: Which of the following should NOT be taken into account in calculating free cash flow? Select one:…

A: Free Cash Flow = Net income + Depreciation – Change in Working Capital – Capital Expenditure

Q: If an asset is sold at a gain why is the gain subtracted from net income when computing the net cash…

A: Statement of cash flows: It is one of the financial statement that shows the cash and cash…

Q: Assume that the assets are converted to cash at the estimated current values and the business is…

A: 1. When a company liquidates, there are various creditors a company has to pay. Types of creditors…

Q: The indirect approach subtracts depreciation costs from net income before calculating operating cash…

A: Given : The question explains about Using the indirect technique, depreciation expenses are…

Q: Which of the following expenses apply to or may be claimed by cash basis taxpayers?  a. Depreciation…

A: Under a cash basis, the cash received and cash paid is considered for calculating the income and…

Q: If a company experienced a loss on the disposal of long-term assets, how would this be reported in…

A: Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to…

Q: Explain why depreciation, depletion, and amortization cost are added to net income in the operating…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: Help question 18

A: Cash flow statement:   It is a financial statement used by a company to report the cash inflow and…

Q: Identify, at least, three reasons that make the profit for the reporting period not equal to the net…

A: Net cash inflow refers to the cash generated by an entity from its business after deducting all the…

Q: The effects of the following noncash income or losses shall be removed from the amount of net income…

A: Solution: The effect of the following non cash income for losses shall be removed from the amount of…

Q: tion exp

A: In the indirect (addback) method for calculating cash flows, the accrual basis net income is…

Q: As compared to capitalizing a cash expenditure, what is the initial effect on asset turnover of…

A: Asset Turnover Ratio: The total asset turnover ratio evaluates the efficiency of the organization…

Q: Which of the following is not added to net income as an adjustment to reconcile net income to cash…

A: Cash flows from operating activities is one of the important section of cash flows statement which…

Q: A statement of cash flows prepared in accordance with IAS 7 Statements of cash flows opens with the…

A: Cash flow statement shows the cash inflow and cash outflow due to the operating, financing and…

Q: Which of the following is used when computing for the accounting rate of return (ARR)? a. Income…

A: The accounting rate of return is the average net income an asset is expected to generate on the…

Q: Why you have not taken depreciation(deduct from profit and then add to obtain cash flows) into accou

A: Depreciation   is a admissible expenses  for taxation purpose i.e., tax will be calculated on the…

Q: In the statement of cash flows using indirect method, depreciation is treated as an adjustment to…

A: Depreciation expense represents the cost of tangible asset allocated over the useful life of asset.…

Q: Explain the after-tax effect on cash of disposing of assets. Short answer please

A: Cash flows help the management to determine the NPV and evaluate any project based on their NPV.

Q: Which of the following is an appropriate method of computing free cash fl ow to the fi rm? A . Add…

A: Free cash flow to the firm is the amount of cash flows from the operational activities of a firm…

Q: Under the indirect method, depreciation expense is addedto net income to report cash flows from…

A: The indirect method helps the company to convert accrual basis of accounting to cash basis by…

Q: Provide a brief explanation of why depreciation of capital assets is considered in determining…

A: Capital assets are those assets which are held by the business for longer period of time.…

Q: If all values carry a + sign, cash flow before taxes is represented by the following equation:a.…

A: Cash flow before taxes: It includes the sum total of all the cash inflows and outflows before…

Q: In the calculation of cash from operating activities, depreciation is added back because it is: A.…

A: Indirect method of statement of cash flow involves a reconciliation from profit before tax,…

Q: When using the indirect method to determine operating cash flows, how is depreciation expense…

A: Introduction: The cash flow statement is comprised of the following items: Cash flow statements…

Q: The method of presenting cash flow from operations where net income is adjusted for items without…

A: Cash flow from operations means the net of cash inflows and cash outflows resulting from the…

Q: To account for cash flows from operational operations, the indirect method adds depreciation…

A: Here is the Answer