Capital Budgeting Project Assignment

Which of the following is an acceptable way to find the operating cash flow for a capital budgeting project?

a. Top-down approach: OCF = EBIT + Depreciation – Taxes

b. Bottom-up approach: OCF = Net Income + Depreciation

c. Tax-Shield approach: OCF = (Sales – Costs)*(1-tax rate) + Depreciation*tax rate

d. All three of the above will find the project OCF.

e. None of the above. Get Finance homework help today

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