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

Question

Quizplus · Accepted Answer

The bottom-up approach only applies when the interest expense is equal to zero. This is because the bottom-up approach involves calculating the cash flows from individual activities and adding them up, which does not take into account the interest expense. If there is an interest expense, it needs to be considered using the top-down approach.

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