Depreciation and amortization expenses are: a. Part of current assets on the balance sheet. b. After-tax expenses that reduce a firm’s cash flows.

Question:

Depreciation and amortization expenses are:

a.Part of current assets on the balance sheet.

b.After-tax expenses that reduce a firm’s cash flows.

c.Long-term liabilities that reduce a firm’s net worth.

d.Noncash expenses that cause a firm’s after-tax cash flows to exceed its net income.


Answer: 

Depreciation and amortization expenses are:

(d)       Noncash expenses that cause a firm’s after-tax cash flows to exceed its net income.

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