If a firm's net income is positive and its noncash expenses are positive,which of the following could account for a negative amount of cash provided by operations?
A) Current assets decrease more than current liabilities decrease.
B) Current assets increase more than current liabilities increase.
C) Current assets decrease more than current liabilities increase.
D) A large addition is made to plant and equipment.

Question

Quizplus · Accepted Answer

If current assets increase more than current liabilities increase, it means more cash is tied up in assets, reducing cash flow from operations despite positive net income and noncash expenses.

If a Firm's Net Income Is Positive and Its Noncash