The cash flow from operations for Charlene Energy Inc. is $25,000 for the current year. If the amortization expense increases by $5,000 and other factors remain same, under which of the following assumptions will the cash flow from operations remain unaffected?
A- change in amortization method will not have a retrospective effect.
B- The company has an infinite life.
C- The company is operating in a tax-free environment.
D- The company can change the depreciation method during a financial year.
The right answer is (c) but I don not know why?
A- change in amortization method will not have a retrospective effect.
B- The company has an infinite life.
C- The company is operating in a tax-free environment.
D- The company can change the depreciation method during a financial year.
The right answer is (c) but I don not know why?