Cash Flows Used in NPV and IRR Analyses Include All

question 61

Multiple Choice

Cash flows used in NPV and IRR analyses include all of the following EXCEPT:

• A)future cost savings.
• B)future increased sales.
• C)residual value.
• D)depreciation expense.

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Definitions:

Variance

The difference between planned or expected outcomes and the actual outcomes in finance and accounting.

Cost Drivers

Factors that cause a change in the cost of an activity, used in activity-based costing to allocate costs accurately.

Revenue Variances

The difference between actual revenue and budgeted or projected revenue.

Spending Variances

The difference between actual spending and budgeted or planned spending in various categories.