Which of the Following Statements Is CORRECT

question 70

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 flow,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 flow (NCF)is often defined as follows:
• Net Cash Flow = Net Income + Depreciation and Amortization Charges.

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Definitions:

Elaboration Likelihood Model

A psychological concept that outlines how individuals process persuasive information, either deeply or superficially, affecting attitude change.

Attitude Change

A shift in an individual's feelings, beliefs, or position on a topic due to various influencers, such as new information or social pressure.

Circadian Rhythm

The approximately 24-hour cycle in the physiological processes of living beings, influencing sleep-wake patterns, hormone release, and other bodily functions.

Paradoxical Sleep

Another term for REM (Rapid Eye Movement) sleep, characterized by the paradox of the brain being highly active while the body is immobilized.