In Calculating Cash Flows from Operating Activities Using the Indirect

question 2

Multiple Choice

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

• A) added to net income
• B) deducted from net income
• C) ignored because it does not affect cash
• D) reported supplementally as a noncash investing and financing activity

Understand the concept of net cash flows in capital budgeting, including what is and isn't included.

Learn the factors considered in cash flow estimation for capital projects.

Grasp the significance of opportunity costs in project evaluation.

Differentiate between the various types of costs related to capital budgeting such as sunk, opportunity, and financing costs.

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Definitions:

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Directive Leadership Style

A leadership approach where the leader takes a highly authoritative role, making decisions unilaterally and expecting subordinates to follow instructions without much input.

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