Mauldin Welding Shop Is Considering the Purchase of New High-Tech

question 89

Multiple Choice

Mauldin Welding Shop is considering the purchase of new high-tech welding equipment.If the equipment is purchased, Mauldin will incur an additional $8,000 in annual depreciation expense for the next five years.In determining the cash flows associated with the new equipment, the $8,000 of annual depreciation expense is

• A)a cash outflow.
• B)a cash inflow.
• C)a sunk cost.
• D)ignored in the cash flow analysis.

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