Question
1. In preparing the Statement of Cash Flows a deprecation is added to net income when calculating Cash From Operations (under the Indirect Method). B.deprecation
1. In preparing the Statement of Cash Flows
| a | deprecation is added to net income when calculating Cash From Operations (under the Indirect Method). | |
| B.deprecation is added to net income when calculating Cash From Operations (under the Indirect Method) because depreciation is a non-cash expense.
| ||
| C. Investing Activities and Financing Activities do not require any adjustments to net income. | ||
| d | All of the above. |
2.
Why do some companies prefer the use of residual income over return on investment in decision making?
| a. | The concept. | |
| b. | ROI can motivate managers to make investment decisions that are not necessarily in the companys best interest. | |
| c. | The calculations for economic profit are easier. | |
| d. | The data needed to calculate return on investment are not always available.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started