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Inocencio Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment.
The total cash flow net of income taxes in year 3 is:
GAAP
Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to ensure financial statements are consistent and comparable.
Freight-out
The cost associated with transporting goods from the seller to the buyer, usually considered a selling expense.
Purchase Returns
Goods returned to the supplier from the buyer, often due to defects or other reasons for dissatisfaction.
Beginning Inventory
The value of goods available for sale at the start of an accounting period, carried over from the previous period's closing inventory.
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