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प्रश्न
Statement - I: Snow Limited earned a profit of ₹ 2,00,000 after charging depreciation of ₹ 50,000 on machinery. So, operating profit before working capital changes would be ₹ 2,50,000.
Statement - II: Depreciation is added back to net profit as it does not result in any cash flow.
Choose the correct option from the following:
पर्याय
Only Statement - I is true.
Only Statement - II is true.
Both the Statements are false.
Both the Statements are true.
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उत्तर
Both the Statements are true.
Explanation:
Depreciation is a non-cash expense as it does not involve any cash outflow. Therefore, it is added back to net profit under non-cash and non-operating expenses.
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