BUSI 2504 Study Guide - Operating Cash Flow, Capital Cost Allowance, Dividend Tax
25 Feb 2014
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Lo1 the difference between accounting value (or book value) and market value. Lo2 the difference between accounting income and cash flow. Lo3 the difference between average and marginal tax rates. Lo4 how to determine a firm"s cash flow from its financial statements. Lo5 the basics of capital cost allowance (cca) and undepreciated capital cost (ucc). Answers to concepts review and critical thinking questions. Note that this way is not necessarily correct; it"s the way accountants have chosen to do it. 10. (lo4) depreciation is a noncash deduction that reflects adjustments made in asset book values in accordance with the matching principle in financial accounting. Interest expense is a cash outlay, but it"s a financing cost, not an operating cost. (lo4) for a successful company that is rapidly expanding, for example, capital outlays will be large, possibly leading to negative cash flow from assets. The same might be true if it becomes better at collecting its receivables.
