In Order to Accurately Estimate Cash Flow from Operations, Depreciation

question 18

True/False

In order to accurately estimate cash flow from operations, depreciation must be added back to net income. The reason for this is that even though depreciation is deducted from revenue it is really a non-cash charge.

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Definitions:

Regular Selling Price

the normal price at which a good or service is sold before any discounts or promotions.

High-end Stove

A premium kitchen appliance that offers superior performance, quality, and features compared to standard models.

Sale Price

The price at which an item is sold to the public, often after discounts are applied.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.