How is net cash flow calculated if depreciation is the only noncash item in a firm's income statement?
A) Net cash flow = Net income + Depreciation and amortization
B) Net cash flow = Accounting profit - Depreciation and amortization
C) Net cash flow = Accounting profit - Operating cash flow
D) Net cash flow = Fixed assets + Depreciation and amortization
E) Net cash flow = Operating cash flow - Depreciation and amortization

Question

Quizplus · Accepted Answer

Net cash flow is calculated by adding back non-cash expenses like depreciation to the net income, as these do not affect the actual cash flow.

How Is Net Cash Flow Calculated If Depreciation Is the Only