Which of the Following Equation Is Correct

question 173

Multiple Choice

Which of the following equation is correct?

• A) EBIT + depreciation - taxes = OCF
• B) Ending net fixed assets + depreciation = Net capital spending
• C) Current assets - current liabilities = Change in net working capital
• D) Operating cash flow + net capital spending = Cash flow from assets
• E) EBIT - Depreciation + Taxes = OCF

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Definitions:

Federal Withholding Tax

Income tax withheld from employees' wages and paid directly to the government by the employer, acting as an advance payment of income tax.

Semimonthly Wages

Wages that are paid twice a month, resulting in 24 pay periods within a year.

Self-Employment Taxes

Taxes that must be paid by individuals who work for themselves, covering Social Security and Medicare contributions.

Net Earnings

The amount of income left over after all expenses and taxes have been subtracted from total revenue, often referred to as net income.