One basic technique used to evaluate after-tax operating cash flows is to ________.
A) add noncash charges to net income
B) subtract depreciation from operating revenues
C) add cash expenses to net income
D) subtract cash expenses from noncash charges

Question

Quizplus · Accepted Answer

Adding noncash charges, such as depreciation, to net income allows for the calculation of operating cash flows after considering tax implications. This adjustment accounts for the fact that noncash expenses do not directly affect cash flow but do impact taxable income.

One Basic Technique Used to Evaluate After-Tax Operating Cash Flows