Question

Operating cash flow will increase with a decrease in Select one:

A. inventories.
B. depreciation expense.
C. capital expenditures.

Answer 1

Operating cash flow will increase with a decrease in inventories, but not with a decrease in depreciation expense or an increase in capital expenditures.

Step-by-step explanation:

To increase operating cash flow, there needs to be a decrease in certain factors. A decrease in inventories will increase operating cash flow because it means that less cash is tied up in inventory and more is available for other uses. However, a decrease in depreciation expense will not directly increase operating cash flow because it is a non-cash expense. Lastly, capital expenditures refer to investments in long-term assets and increasing these expenditures can decrease operating cash flow.