Which One of the Following Statements Is Correct About the Pro

Which one of the following statements is correct about the pro forma statements for a cost-cutting project which requires an initial investment in fixed assets?

A) the depreciation expense has no effect on the cash flows
B) the operating income is equal to the annual pre-tax cost savings
C) the net income and the operating cash flow must both be positive
D) the earnings before interest and taxes will be negative
E) the tax amount must be negative if the project is acceptable