The Extent to Which a Firm Adjusts Net Income for Changes

Multiple Choice

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations._____ will likely show a substantial addback to net income for depreciation expense, whereas _____will show a smaller amount.

A) Service firms; firms that decrease in size
B) Service firms; firms that increase in size
C) Firms that decrease in size; firms that increase in size
D) Service firms; capital-intensive firms
E) Capital-intensive firms; service firms