The Cash Flows of a New Project That Come at the Expense

question 63

Multiple Choice

The cash flows of a new project that come at the expense of a firm's existing projects are called

• A)opportunity costs.
• B)net working capital expenses.
• C)erosion costs.
• D)salvage value expenses.
• E)sunk costs.

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Definitions:

Beginning Balance

The amount of money in an account at the start of a new accounting period.

Credit Side

The section of an account where increases in liabilities, income, and equity are recorded, as opposed to the debit side, which records increases in assets and expenses.

Normal Credit Balance

The usual balance side of an account that increases its value, typically used for liabilities, revenues, and equity accounts.

Withdrawals

Money taken out from a business by its owner(s) for personal use, reducing the owner's equity in the business.