Which of the Following Adjustments Should NOT Be Made When

question 17

Multiple Choice

Which of the following adjustments should NOT be made when computing free cash flow from incremental earnings?

• A) adding depreciation
• B) subtracting increases in Net Working Capital
• C) subtracting all noncash expenses
• D) subtracting depreciation expenses from taxable earnings

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Definitions:

Variable Cost

A cost that varies with the level of output or production activity.

Marginal Product

The marginal product is the additional output gained by employing one more unit of input, such as labor, in the production process.

Bouquets

Arrangements of flowers, often decorative and used as gifts or for special occasions.

Florist

A professional or business that specializes in the arrangement and sale of flowers and floral displays.