A project's operating cash flow will increase when the:
A)depreciation expense increases.
B)sales projections are lowered.
C)interest expense is lowered.
D)net working capital requirement increases.
E)earnings before interest and taxes decreases.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that reduces taxable income, but does not require any cash outflow. Therefore, an increase in depreciation expense will result in higher operating cash flows.

A Project's Operating Cash Flow Will Increase When The