Which of the Following Should Be Included in the Computation

question 17

Multiple Choice

Which of the following should be included in the computation of an expansion project's terminal cash flow?

• A)Any change in net working capital that was recognized at the time the projectwas purchased
• B)The project's externalities
• C)The initial cost (purchase price) of the project
• D)The opportunity cost of the project
• E)The sunk cost associated with the project

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Definitions:

Short-term Investments

Assets of a financial nature anticipated to be cashed in or disposed of within one year.

Adjusting Entries

Adjusting Entries are journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, thereby preparing the accounts for the next accounting period.

Unadjusted Trial Balance

A preliminary list of all accounts and their balances before any adjustments are made for accruals, deferrals, and error corrections.