Depreciation is a source of cash inflow because
A)it is a non-cash expense.
B)it supplies cash for future asset purchases.
C)it is a tax-deductible cash expense.
D)it is a taxable expense.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it does decrease taxable income, which can lead to a lower tax liability and an increase in cash flow.

Depreciation Is a Source of Cash Inflow Because