T-18 Multiple Choice 18. According to the cash flow from assets (CFFA), net capi
ID: 2737030 • Letter: T
Question
T-18 Multiple Choice
18. According to the cash flow from assets (CFFA), net capital spending: A. is equal to ending net fixed assets minus beginning net fixed assets.B. is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense.
C. reflects the net changes in total assets over a stated period of time.
D. is equivalent to the cash flow from assets minus the operating cash flow minus the change in net working capital.
E. is equal to the net change in the current accounts.
Explanation / Answer
When the decrease in net fixed assets is equal to the deprecation expense for a given period, it would mean that neither any new fixed assets were purchased nor any of the existing fixed assets were sold during that period.
Therefore, if the decrease in the net fixed assets is equal to the depreciation expense, net capital spending is equal to zero.
The correct answer is B.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.