What Effect Does Increasing Depreciation Expense Have on Cash Flows

question 11

Multiple Choice

What effect does increasing depreciation expense have on cash flows?

• A) It increases operating cash flows.
• B) It decreases operating cash flows.
• C) It decreases investing cash flows.
• D) It has no effect.

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Definitions:

Causal Attribution

A mental process of figuring out the reasons behind certain behaviors and outcomes, attributing them to internal or external factors.

Cause-and-Effect

A relationship where one event (the cause) makes another event happen (the effect), establishing a connection between two or more phenomena.

Illusion of Control

The belief that one can exert more influence over events than is actually the case.

External Locus

Refers to the belief that external forces or circumstances control one's life and outcomes, rather than one's own efforts.