Question

To find operating cash flow for the business for the year, add depreciation expense to EBIT and then ________. Question 8 options: A) subtract the interest expenses B) subtract the taxes C) add the taxes D) add interest expenses

Answer 1

B) subtract the taxes

Step-by-step explanation:

The formula to compute the operating cash flow is shown below

The operating cash flow is shown below:

= EBIT + Depreciation - Income tax expense

where,

EBIT = Sales - cost of good sold - depreciation expense

Also the operating cash flow refers to the cash amount i.e. created through the day to day activities within a particular period

Hence, the correct option is b.