Highest operating cash flow

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Reference no: EM131322512

You are asked to select the proposed project A or B that has the highest Operating Cash Flow (OCF). Proposed Project A has estimated net income = - $3,000, depreciation expense of $7,200 and non-cash revenue = $1,000. Proposed Project B has estimated net income = -$1,000, depreciation of $5,000 and non-cash revenue = $500. The other analyst selects Proposed Project A as the highest OCF; you ____ because ____.

Agree; Proposed Project A net income is more negative than Proposed Project B net income.

Disagree; Proposed Project A's OCF is lower than Proposed Project B's OCF

Disagree; Proposed Project A OCF is negative, Proposed Project B OCF is positve

Agree; Proposed Project A OCF is higher than Proposed Project B OCF.

Reference no: EM131322512

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