When Making Replacement Decisions, the Development of Relevant Cash Flows

question 123

Multiple Choice

When making replacement decisions, the development of relevant cash flows is complicated whencompared to expansion decisions, due to the need to calculate __________cash inflows.

• A) non-conventional
• B) conventional
• C) initial
• D) incremental

---

Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Straight-Line Method

A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its useful life.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the correct period for accurate financial reporting.

Sold at a Discount

A transaction where goods or services are sold for a price lower than their usual or market rate.