Initial Cash Flows and Subsequent Operating Cash Flows for a Project

question 26

Multiple Choice

Initial cash flows and subsequent operating cash flows for a project are sometimes referred to as

• A) consistent cash flows.
• B) necessary cash flows.
• C) relevant cash flows.
• D) ordinary cash flows.

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Definitions:

Maturity Value

The amount that will be received at the end of a fixed income investment period, such as bonds or certificates of deposit.

Invested

The process of investing funds or capital into a project anticipating the generation of extra income or gains.

Simple Interest Rate

An interest calculation method where the interest charge is based on the original principal amount, without compounding.

Interest

The cost of borrowing money or the payment received for lending money, usually expressed as an annual percentage of the principal amount.