The bottom-up approach to computing the operating cash ﬂow applies only when:

Question

Quizplus · Accepted Answer

The bottom-up approach to computing the operating cash flow involves starting with the net income and adding back non-cash expenses such as depreciation. The approach assumes that the interest expense is equal to zero, as interest is typically considered a financing activity rather than an operating activity. Therefore, option B is the correct choice.

The Bottom-Up Approach to Computing the Operating Cash ﬂOw Applies