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A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX C To reflect the economic value of the fixed assets

A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX C To reflect the economic value of the fixed assets

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Why is depreciation added to Net CAPEX? A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX с To reflect the economic value of the fixed assets
Transcribed Image Text:Why is depreciation added to Net CAPEX? A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX с To reflect the economic value of the fixed assets
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The net capital expenditures are the difference between capital investments and depreciation, and they depend on how quickly a company is expanding or anticipates expanding. Net capital expenditures for high growth enterprises will be significantly higher than for low growth firms. Therefore, it is impossible to make estimates about net capital expenditures without also making assumptions about future growth.

Depreciation, Net CAPEX.

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