Which One of the Following Statements Is Correct

question 9

Multiple Choice

Which one of the following statements is correct?

• A) Project analysis should only include the cash flows that affect the income statement.
• B) A project can create a positive operating cash flow without affecting sales.
• C) The depreciation tax shield creates a cash outflow for a project.
• D) Interest expense should always be included when analyzing cost-cutting projects.
• E) A bid price maximizes profits on a project for the bidding firm.

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