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:

Multifactor Productivity

A measure of economic performance that compares the amount of goods and services produced to the amount of combined inputs used to produce those goods and services.

Chemicals

Substances used in or produced by chemical processes, often characterized by potential reactivity and used in a wide range of industrial applications.

Labour

The workforce involved in the creation of goods and provision of services in an economy.

Ethical Challenges

Situations in which individuals or organizations must make decisions that involve distinguishing between morally right and wrong actions.