Increasing which one of the following will increase the operating cash flow assuming that the bottom-up approach is used to compute the operating cash flow?
A)erosion effects
B)taxes
C)fixed expenses
D)salaries
E)depreciation expense

Question

Quizplus · Accepted Answer

The bottom-up approach for calculating operating cash flow uses the formula:
Operating Cash Flow = EBIT + Depreciation Expense - Taxes.
Therefore, increasing depreciation expense (option E) will result in an increase in operating cash flow. The other options listed (erosion effects, taxes, fixed expenses, and salaries) do not directly impact the calculation of operating cash flow using the bottom-up approach.

Increasing Which One of the Following Will Increase the Operating