Depreciation Is Usually NOT Considered an Operating Cash Flow in Capital

question 135

Multiple Choice

Depreciation is usually NOT considered an operating cash flow in capital budgeting because ________.

• A) depreciation is usually a constant amount each year over the life of the capital investment
• B) deducting depreciation from operating cash flows would be counting the lump-sum amount twice
• C) depreciation usually does not result in an increase in working capital
• D) depreciation usually has no effect on the disposal price of the machine

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Definitions:

Exchange

The act of giving one thing and receiving another in return, especially in a trade or economic context.

Asynchronous Communications

A form of communication where the exchange of information occurs without requiring participants to be simultaneously active, enabling interaction without the need for immediate response.

Mail and Package Delivery

A service provided by various companies and postal systems that involves the collection, sorting, transportation, and delivery of letters and parcels.

Personal Digital Assistants

Small portable devices that help in managing personal information and can perform various tasks like scheduling appointments, sending messages, and accessing the internet.