Adding depreciation expense to net profit equals:
A)Profit before tax
B)Total revenues
C)The depreciation tax shield
D)cash flows from operations

Name: Adding depreciation expense to net profit equals: A)Profit before tax B)Total revenues C)The depreciation tax shield D)cash flows from operations
Brand: Quizplus
Rating: 4.8 (43 reviews)

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense, so adding it back to net profit helps calculate cash flows from operations, reflecting the actual cash generated by the business.

Adding Depreciation Expense to Net Profit Equals