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Pls,Sir. Why do we;
1.subtract profit on sale of non-current assets(income) or investment instead of adding
2.add depreciation (expense) instead of subtracting itI really do suggest you watch the free lectures!
Profit on sale will have been included in the profit, but is not a cash flow so it needs removing.
Depreciation will have been charged against the profit, but it is not a cash payment and so it needs adding back.
The whole point is to convert the profit into a ‘cash profit’.
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