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Assume an All-Equity Firm Has Positive Net Earnings

Question 28

Multiple Choice

Assume an all-equity firm has positive net earnings.The operating cash flow of this firm:


A) ignores both depreciation and taxes.
B) is unaffected by the depreciation expense.
C) must be negative.
D) increases when the tax rate decreases.
E) is equal to net income minus depreciation.

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