Recall the DCF valuation videos posted and our discussions on the different ways to compute free cash flows to the firm. In finance, why do we add back depreciation and amortization in computing free cash flows?

A. Firms often overspend for assets, leading depreciation to be too high.

B. Depreciation appears on the balance sheet, not the income statement.

C. Depreciation isnt a cash expense.

D. Depreciation is highly uncertain and that is why it should be counted.

E. Depreciation is highly uncertain and should not be counted.