1. As seen on an income statement:
A- interest is deducted from income and increases the total taxes incurred.
B- the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and interest expenses.
C- depreciation is shown as an expense but does not affect the taxes payable.
D- depreciation reduces both the pretax income and the net income.
E- interest expense is added to earnings before interest and taxes to get pretax income.
2. refers to the changes in net capital assets.
A- Operating cash flow
B- Cash flow from investing
C- Net working capital
D- Cash flow from assets
E- Cash flow to creditors