Hubble corporation, which uses the indirect method to prepare its statement of c

Question

Hubble corporation, which uses the indirect method to prepare its statement of cash flows, sold used equipment for cash. Which statement regarding this sale is true.
a. the cash from operating activites will be greater if the direct method is used to prepare the statement of cash flows.
b.The effect on cash from operating activites depends on whether there was a gain or loss on sale.
c.The cash from operating activites will not be reported if the indirect method is used to prepare the statement of cash flows.
d.The cash from operating activites will be less if the direct, rather than indirect, method is used to prepare the statement of cash flows.

please explain why you pick that one.

Explanation / Answer

the cash from operating activites will be greater if the direct method is used to prepare the statement of cash flows.

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