A firm plans to depreciate a five year asset in the next planning period. The statements that will be directly affected immediately are the _____. Pro-forma income statement, pro-forma cash flow, and cash budget. Pro-forma income statement and pro-forma balance sheet Pro-forma balance sheet and cash budget Pro-forma income statement, pro-forma balance sheet, and cash budget

A firm plans to depreciate a five year asset in the next planning period. The statements that will be directly affected immediately are the _____. Pro-forma income statement, pro-forma cash flow, and cash budget. Pro-forma income statement and pro-forma balance sheet Pro-forma balance sheet and cash budget Pro-forma income statement, pro-forma balance sheet, and cash budget

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter12: Valuation: Cash-flow Based Approaches

Section: Chapter Questions

Problem 2BIC

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Question

A firm plans to depreciate a five year asset in the next planning period. The statements that will be directly affected immediately are the _____.
Pro-forma income statement, pro-forma cash flow, and cash budget.

Pro-forma income statement and pro-forma balance sheet

Pro-forma balance sheet and cash budget

Pro-forma income statement, pro-forma balance sheet, and cash budget.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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