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IMANET CMA Exam - Topic 2 Question 29 Discussion

Actual exam question for IMANET's CMA exam
Question #: 29
Topic #: 2
[All CMA Questions]

Which one of the following statements concerning cash flow determination for capital budgeting purposes is not correct?

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Suggested Answer: B

Tax depreciation is relevant to cash flow analysis because it affects the amount of income taxes that must be paid. However, book depreciation is not relevant because it does not affect the amount of cash generated by an investment.


by Gearldine at May 08, 2022, 04:02 AM

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Tresa
4 months ago
Wait, are we really considering book depreciation? That seems off.
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Filiberto
4 months ago
D is crucial, can't ignore working capital changes.
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Reena
4 months ago
C is spot on, sunk costs are irrelevant!
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Isaiah
4 months ago
I disagree with B, book depreciation shouldn't affect cash flow.
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Clemencia
5 months ago
A is definitely correct, tax depreciation matters!
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Tresa
5 months ago
I definitely recall that net working capital changes are crucial for cash flow forecasts, so D should be correct.
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Afton
5 months ago
I feel like we had a practice question about sunk costs, and I think they shouldn't be included in cash flow calculations. So, C seems right.
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Laticia
5 months ago
I'm not entirely sure about book depreciation. I thought it was important for net income, but maybe not for cash flow?
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Ronald
5 months ago
I remember we discussed how tax depreciation impacts cash flows, so I think A is correct.
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Gail
5 months ago
I'm pretty familiar with RSVP-TE, so I think I can handle this one. Let me think through the options carefully.
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Tuyet
5 months ago
Hmm, I'm a bit unsure about this one. I know access tokens are used for authentication, but I can't recall the exact expiration time. I'll have to think this through carefully.
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Jessenia
5 months ago
Hmm, I'm a bit unsure about this one. There are a few options that seem relevant, but I'm not entirely sure which one is the "most important" reason. I'll have to think it through carefully.
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