New World Aviation's financial statements show that its net income increased significantly compared to the prior year, but net cash flow from operations declined.

New World Aviation's financial statements show that its net income increased significantly compared to the prior year, but net cash flow from operations declined. What might explain this result?

Operating income declined
Cost of goods sold increased
Interest expense increased
Depreciation expense declined significantly
Expenditures on fixed assets declined

Expert Solution

option D: Since depreciation is added back to calculate operating cashflows, if it reduce significantly the cashflow can decrease compared to previous year

jeff jeffy answered 2 years ago

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