When using EBITDA instead of net income to measure a firm's operational characteristics, why are depreciation and amortization expense added back? O A. Depreciation and amortization expense are superficial. B. Depreciation and amortization expense represent expenses from an accounting standpoint but don't represent actual cash outflows. C. Depreciation and amortization expense are random numbers and can be ignored. D. Depreciation and amortization.
When using EBITDA instead of net income to measure a firm's operational characteristics, why are depreciation and amortization expense added back? O A. Depreciation and amortization expense are superficial. B. Depreciation and amortization expense represent expenses from an accounting standpoint but don't represent actual cash outflows. C. Depreciation and amortization expense are random numbers and can be ignored. D. Depreciation and amortization.
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
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
Transcribed Image Text:When using EBITDA instead of net
income to measure a firm's
why are
operational characteristics,
depreciation and amortization
expense added back?
O A. Depreciation and amortization
expense are superficial.
OB. Depreciation and amortization
expense represent expenses from
an accounting standpoint but don't
represent actual cash outflows.
O C. Depreciation and amortization
expense are random numbers and
can be ignored.
D. Depreciation and amortization
expense represent an insignificant
cash outflow for a business.
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