Since Present Value Analysis Is Concerned with Cash Flows, Which

question 77

Multiple Choice

Since present value analysis is concerned with cash flows, which of the following is not true?

• A)Depreciation is always an incremental cash inflow.
• B)Revenues are inflows in the period when the cash is received.
• C)Expenses are outflows in the period when they are paid.
• D)The salvage value of equipment is considered in the analysis.

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Definitions:

Superior Rights

Superior rights denote a higher or preeminent claim or entitlement to property, benefits, or legal priority over others.

After-Acquired Property Clause

A provision in a legal agreement that allows a creditor to claim ownership of assets acquired by the debtor after the signing of the agreement.

Financing Statement

A document filed to give public notice that a lender has a security interest in a debtor's assets, typically used in secured transactions.

Enforceable Security Interest

A legal claim or right on property or assets that can be legally upheld by a court to secure the repayment of a debt.