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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