Which of the following is a reason why incremental earnings may be different from incremental cash flows?

Select one:

a$.$

Changes in accounts receivable reflects non$-$cash sales present in incremental earnings that are not incremental cash flows.

b$.$

Depreciation is a cash expense, but does not appear in incremental earnings.

c$.$

Capital expenditures appear on the income statement. However, as these costs are depreciated over time, they should not be present in incremental cash flows.

d$.$

Firms pay taxes based on incremental cash flows, not incremental earnings.