If All Revenue Generated by an Investment Is Immediately Received

question 8

Multiple Choice

If all revenue generated by an investment is immediately received in cash, and all of the investment's expenses (other than depreciation) are immediately paid in cash, annual net cash flow of the investment may be determined by:

• A) Subtracting the investment's annual depreciation expense from the annual net income earned by the investment.
• B) Adding the investment's annual depreciation expense to the annual net income earned by the investment.
• C) Subtracting the investment's annual expenses from the annual revenue it generates.
• D) Adding the investment's annual depreciation expense to the annual revenue generated by the investment.