Which of the Following Describes the "Bottom-Up" Approach to Defining

question 86

Multiple Choice

Which of the following describes the "bottom-up" approach to defining operating cash flow?

• A) EBIT + D - Taxes
• B) NI + D
• C) (S - C) (1 - T_C) + DT_c
• D) S - C - Taxes
• E) NI + D - taxes

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Definitions:

Total Operating Income

The profit achieved from a company's core business operations, excluding deductions of taxes and interest.

Net Cash Inflows

The amount by which the cash inflow from operations exceeds its cash outflow, usually measured within a specific period.

Net Cash Inflow

The excess of cash receipts over cash disbursements during a certain period, reflecting the liquidity generated from operations.

Cash Payback Period

The duration it takes for an investment to generate an amount of cash equal to the initial investment cost.