One basic technique used to evaluate after-tax operating cash flows is to
A) subtract depreciation from operating revenues.
B) add cash expenses to net income.
C) subtract cash expenses from noncash charges.
D) add noncash charges to net income.

Question

Quizplus · Accepted Answer

Noncash charges such as depreciation and amortization are added to net income in order to adjust for the fact that they are not actual cash expenses. This yields a more accurate representation of the actual cash generated by the business operations.

One Basic Technique Used to Evaluate After-Tax Operating Cash Flows