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17 June, 15:47

The top-down approach to computing the operating cash flow:

a. ignores noncash expenses

b. applies only if a project increases sales

c. applies only to cost cutting projects

d. is equal to sales - costs - taxes + depreciation

e. is used solely to compute a bid price

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  1. 17 June, 18:21
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    a. ignores non cash expenses

    Explanation:

    The operating cash flow refers to the day to day operating activities which reflect the cash outflow and cash inflow

    The formula to compute the operating cash flow by top-down approach is shown below:

    Operating cash flow = Sales revenue - Cost of goods sold - Taxes

    It does not considered any depreciation or amortization expenses.
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