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16 April, 10:09

Differentiate between net cash flow and accounting profit. A firm has net income of $5 million. Assuming that depreciation of $1 million is its only noncash expense, what is the firm's net cash flow?

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  1. 16 April, 10:24
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    The firm's net cash flow is $6 million.

    Explanation:

    Net income = $5 million

    Depreciation = $1 million

    Net cash flow = $5 million + $1 million

    = $6 million

    Therefore, The firm's net cash flow is $6 million.
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