Explain the effects that depreciation has on both the net income and the operating cash flows of a project.

Depreciation

A technique for distributing the expense of a physical asset throughout its period of usability.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profitability.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating its ability to generate enough cash to maintain or expand operations.