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Assume a fiRm Has Depreciation, Taxes, and Interest Expense

Question 318

Multiple Choice

Assume a firm has depreciation, taxes, and interest expense. In this case, operating cash flow:


A) Is the same as net income.
B) Is the same as net income plus depreciation.
C) Must be positive because depreciation is added to the taxable income.
D) Can be positive, negative, or equal to zero.
E) Is equal to the cash flow to creditors.

Correct Answer:

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