Increasing which one of the following will increase the operating cash flow of a profitable, tax paying company assuming that the bottom-up approach is used to compute the operating cash flow?
A) Erosion effects
B) Taxes
C) Fixed expenses
D) Salaries
E) Depreciation expense

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense that is added back to net income when computing operating cash flow using the bottom-up approach. Therefore, increasing depreciation expense will increase operating cash flow without affecting taxes or fixed expenses.

Increasing Which One of the Following Will Increase the Operating