Please double-check that this is the correct answer. Thank you. When calculating free cash flows, which of the following statements is NOT true regarding the depreciation?As an accrual, depreciation does not factor into free cash flow calculations.O Depreciation is an accrual, not a cash flow.O Depreciation create a tax shield.O Depreciation is first removed and the subsequently added back in when calculating free cash flows.

Depreciation refers to the decrease in the value of an asset over time as a result of wear and tear,…

Answered: When calculating free cash flows, which…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 7QTD

See similar textbooks

Similar questions

Depreciation is incorporated in cash flows because it: A. Is unavoidable cost B. Is a cash flow C. Involves an outflow D. Reduces tax liability
Which sentence is incorrect? Select one: a. Depreciation is not the actual change in the value of the asset. b. Accumulated Depreciation account has effects on the cash flow statement. c. Accumulated Depreciation is called a contra asset account. d. Depreciation is the process of allocating the cost of an asset to expense, not a valuation process.
Select all that are true with respect to depreciation. Group of answer choices Depreciation is a cash flow outflow at the time it is recorded in the financial statements Depreciation itself is not a cash flow Accounting depreciation impacts cash flow, Tax depreciation does not Accounting depreciation does not impact cash flow, Tax depreciation does impact cash flow The depreciation tax shield is a relevant cash flow for decision making
In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense. Group of answer choices True False
how can depreciation be a cash flow?
Depreciation is needed only for computing income taxes. True or false?
Why is Cash Flow affected by depreciation.
⦁ The reason that depreciation is a source of cash inflow is because A. it is a tax-deductible 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.
b. Disregard the assumptions in Part a. What is the depreciable basis? What are the annual depreciation expenses? c. Calculate the annual sales revenues and costs (other than depreciation). Why is it important to include inflation when estimating cash flows? d. Calculate annual net operating profit after sales (NOPAT). Then calculate the operating cash flows.
True or false: The replacement decision of an existing asset cannot be taken using the discounted cash flow analysis. True false question. True False
Some believe that accounting depreciation measures thedecline in the value of fixed assets. Do you agree? Explain.
Provide a brief explanation of why depreciation of capital assets is considered in determining potential net income from an investment, but not included in determining the net cash flow of an investment.

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS