If a Project Permits a Reduction in the Level of Working

question 32

True/False

If a project permits a reduction in the level of working capital, this reduction is assumed to increase cash flows.

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Definitions:

Sales Returns

Transactions involving the return of goods by customers, which reduce the total sales revenue.

Discount Period

The time frame within which a buyer can pay less than the full amount due on an invoice due to early payment incentives offered by the seller.

Credit to Cash

An accounting entry that indicates a decrease in an asset account, specifically reducing cash available.

Freight In

The cost associated with transporting goods into a warehouse or to the buyer, which is often included in the inventory cost of those goods.