Which One of the Following Components Is Not a Component

question 14

Multiple Choice

Which one of the following components is not a component of the equity valuation cash flow?

• A) NOPAT
• B) depreciation and amortization expense
• C) change in net operating working capital without surplus cash)
• D) capital expenditures
• E) net debt issues

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Definitions:

Depreciation

The reduction in value of tangible assets over time due to use and wear and tear.

Equipment

Durable goods used in operations, such as machinery and office hardware.

Equipment Purchase

The acquisition of physical assets such as machinery or office equipment that a business uses in its operating activities.

Cash

Money in the form of physical currency or balances held in bank accounts, considered the most liquid form of assets.