1

Why is depreciation added to net income in the Cash Flow from Operating Activities section on a firm's Statement of Cash Flows?

Select one:

a. Firms typically invest in new property, plant and equipment in a given year by an amount that exceeds the depreciation expense for that year

b. Some of the firm's assets are often not depreciated to zero on the balance sheet

c. Depreciation is a non-cash expense that was subtracted on the Income Statement to determine Net income

d. Depreciation expense is completely offset by any increases in retained earnings