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Introduction to Indirect Method

Which of the ...

Question

Which of the following is not a cash outflow for the firm?

A

Depreciation

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B

Dividends

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C

Interest payments

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D

Taxes

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Solution

The correct option is A Depreciation
Cash outflow is the amount of cash that a business disburses.
Cash outflow results from expense or investments.
A company may be required to seek additional finance if cash outflow exceeds cash inflow.

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