Why is the depreciation tax shield a component of analyzing investment decisions? O A. Depreciation causes a cash outflow that is added to determine net income. O B. Though no cash was paid out, depreciation was included on the tax return, which caused the company to pay taxes on the amount of depreciation. O C. Depreciation lowers cash outflows for income taxes paid. O D. Depreciation creates cash flows that do not appear on the income statement.

Q: Why do DCMs use dividends and not earnings in their formulas? a. Because earnings are not equal to…

A: DCMs seek to evaluate the fair value of a company regardless of current market conditions, taking…

Q: What happens if economic engineers invest too much in assets?

A: Economic engineers always combine finance with engineering and develop various models to deal with…

Q: Which of the following questions is not addressed by the statement of cash flows? Multiple Choice O…

A: Cash Flow Statement: A cash flow statement is a kind of financial statement that offers aggregate…

Q: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in…

A: True

Q: When calculating free cash flows, which of the following statements is NOT true regarding the…

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

Q: The depreciation cost is included in the cash flow analysis since it is a book cost Select one: True…

A: Financial Statement Analysis: Financial statement analysis is the most common way of dissecting an…

Q: Answer for question 6 is still wrong. What would be the impact on cash flow if depreciation was…

A: Cash flow includes only cash dealt transactions. Since depreciation is a non-cash item, it is added…

Q: A Loss on sale on assets will decrease cash flows True  False

A: Statement of Cash Flows: Statement of Cash Flow is one of the main four financial statements,…

Q: Which one of these cash flow measures has been reduced by additions to PP&E (which are called…

A: Property, plant and equipment(PPE) is a capital expenditure, it cause outflow of funds.

Q: indirect method of reporting cash flows from operating activities focuses on the differences between…

A: Cash flow statement is a financial statement that shows how changes in balance sheet accounts and…

Q: Is a negative free cash flow (FCF) always a bad sign? A negative free cash flow means that the…

A: Yes. Negative free cash flow is not necessarily bad. Most rapidly growing companies have negative…

Q: 28) A loss on sale of land will have the following effect on determining Cash Flows using the…

A: Cash flow statement shows the net cash flow from different activities like operating, financial and…

Q: Both depreciation and amortization are cash expenses that will serve to boost the firm’s after-tax…

A: Depreciation is charged to record reduction in value of fixed assets over the period of time. For…

Q: In cash flow estimation, depreciation shelters company's income from A. expansion B. salvages C.…

A: The reduction in income tax liability due to depreciation means that the company has more cash…

Q: For each statement in parts a to d, give a short answer or indicate True orFalse. a. Which of the…

A: Cash flows are the cash receipts and the payment the organization receives the given period of time.…

Q: In cash flow estimation, depreciation shelters company's income from. I am not satisfy give downvote…

A: In cash flow estimation, depreciation is an accounting method used to allocate the cost of a…

Q: What is Human Capital? A. Part of the country's current output and imports is not consumed or…

A: The objective of the question is to identify the correct definition of Human Capital from the given…

Q: Cash flows from selling machinery would be classififed as investing activities. True False

A: Investing activities is an important section in cash flow statement which shows all cash inflows and…

Q: When using EBITDA instead of net income to measure a firm's operational characteristics, why are…

A: EBITDA means earnings before interest, tax, depreciation and amortisation. It means all these have…

Q: Assuming that there are no income taxes, which of the following is correct concerning depreciation?…

A: Depreciation is reduction in value of asset due to wear and tear of asset with the passage of time…

Q: After-Tax Cash Flows For each of the following independent situations, compute the net after-tax…

A: In capital budgeting decisions, net after-tax cash flows are used in analyzing an investment…

Q: How does the annual rate of return differ from other methods? It has more complex calculations. It…

A: The annual rate of return (ARR) is a financial metric used to evaluate the profitability of an…

Q: 13. Using the indirect method to calculate net cash provided (or used) by operating activities,…

A: Statement of Cash Flows: Statement of Cash Flow is one of the main four financial statements,…

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.