Non cash revenues and non cash charges if it subtracted from net income is equal to___________?
Correct answer: C. Net cash flow
- A. Free cash flow
- B. Retained cash flow
- C. Net cash flow
- D. Financing cash flow
Explanation
Under the indirect cash-flow method, net income is adjusted by adding non-cash charges and subtracting non-cash revenues to arrive at net cash flow. The wording is awkward, but the intended result is net cash flow.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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