Which One of the Following Statements Is Correct

question 21

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 as a cash outflow when analyzing a project.
• E)The opportunity cost of a company-owned building that is going to be used in a new project should be included as a cash inflow to the project.

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Definitions:

Material Terms

In a contract, the terms that allow a court to determine what the damages are in the event that one of the parties breaches the contract; include the subject matter, quantity, price, quality, and parties.

Express Warranties

Explicit guarantees made by a seller that affirm or promise specific attributes or conditions of a product.

Statute of Limitations

A law that sets the maximum period one can wait before filing a lawsuit, depending on the type of case or claim.

Warranty Rights

The entitlements a buyer has under a warranty, including repair, replacement, or refund for products that fail to meet the specified standards.