Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) Depreciation and amortization are not cash charges, so neither of them has an effect on a firm's reported profits.
• B) The more depreciation a firm reports, the higher its tax bill, other things held constant.
• C) People sometimes talk about the firm's net cash provided (used) by operations, which is shown as the lowest entry on the income statement, hence it is often called "the bottom line."
• D) Depreciation reduces a firm's cash balance, so an increase in depreciation would normally lead to a reduction in the firm's net cash flow.
• E) Net cash provided (used) by operations is often defined as follows:
• Net cash flow provided (used) by operations = Net Income + Noncash Adjustments + Working Capital Adjustments.

---

Definitions:

Orexin Levels

The concentration of orexin peptides in the body, which are crucial in regulating wakefulness and appetite.

Hunger-Dampening Hormone

A biochemical that suppresses appetite, such as leptin, which is produced by fat cells.

Leptin

A hormone produced by fat cells that regulates body weight by signaling the brain to reduce appetite and burn fat stored in the body.

Fat Cells

Fat cells, also known as adipocytes, store energy in the form of fat and play key roles in metabolism, hormone regulation, and thermal insulation.