The Operating Cash Flows of a Project

question 98

Multiple Choice

The operating cash flows of a project:

• A)are unaffected by the depreciation method selected.
• B)are equal to the project's total projected net income.
• C)decrease when net working capital increases.
• D)include any aftertax salvage values.
• E)include erosion effects.

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Definitions:

Matching Principle

An accounting principle that requires expenses to be recorded and recognized in the same period as the revenues they helped to generate.

Expenses

Costs incurred in the normal course of business to generate revenues, including costs such as rent, salaries, and utility expenses.

Related Revenue

Income generated from sales or transactions that are directly related to the core operations or primary activities of a business.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed; it is recorded as a liability on the balance sheet until the transaction is completed.