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You are to calculate operating cash flow using the following information: sales, net income, depreciation, and net initial investment. If interest expenses are zero, then it would likely be easiest for you to use the _______________________ approach.
A) Conventional.
B) Tax shield.
C) Bottom-up.
D) Top-down.
E) Depreciation first.
Operating Cash Flow
The amount of cash generated by a company’s normal business operations, indicating whether a company is able to generate sufficient positive cash flow.
Top-Down Approach
An investment strategy that begins with analyzing macroeconomic factors, then drilling down to the industries and finally individual companies to make investment decisions.
Net Initial Investment
The total upfront cost required to initiate an investment, including all relevant expenses minus any cash inflows.
- Comprehend and compute cash flows from operations employing various methodologies, including but not limited to the top-down and bottom-up approaches.
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Learning Objectives
- Comprehend and compute cash flows from operations employing various methodologies, including but not limited to the top-down and bottom-up approaches.
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