Increasing taxes will increase the operating cash flow assuming that the bottom-up approach is used to compute the operating cash flow? (2 Points) 0 True 0 False

Finance Feb 03, 2021

Increasing taxes will increase the operating cash flow assuming that the bottom-up approach is used to compute the operating cash flow? (2 Points)
0 True
0 False

Expert Solution

The above statement that "Increasing taxes will increase the operating cash flow assuming that the bottom up approach is used to compute the operating cash flow" is false. In the case of bottom up approach we will start with Net Income and add back non cash expenses. Since tax is not a non-cash expense, Increase in taxes will not increase operating cash flows.

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