Al's has a positive net income and a marginal tax rate of 34 percent.Given this,an increase in which one of the following will cause the operating cash flow to increase?

Question

Quizplus · Accepted Answer

An increase in depreciation will cause the operating cash flow to increase because it is a non-cash expense that reduces the taxable income and thus, reduces the amount of taxes that need to be paid. Therefore, the net income will increase, and so will the operating cash flow.

Al's Has a Positive Net Income and a Marginal Tax