Question: Why do you need to add back depreciation in the indirect method of modeling cash flows? Because depreciation is a cash expense that needs to

Why do you need to add back depreciation in the indirect method of modeling cash flows?
Because depreciation is a cash expense that needs to be reflected in the cash flow statement.
Because depreciation is a non-cash expense that reduces net income but does not affect cash flows.
To ensure that the total cash flow equals the total change in cash on the balance sheet.
To account for the cash used in purchasing fixed assets during the period.

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