If you start with incremental net operating profits after tax (NOPAT) and add depreciation and amortization to it, then you will obtain incremental cash flow from operations.

Question

Quizplus · Accepted Answer

This statement is correct. Incremental net operating profits after tax (NOPAT) does not take into account non-cash expenses like depreciation and amortization, which are added back to it to arrive at the incremental cash flow from operations.

If You Start with Incremental Net Operating Profits After Tax