When Compiling the Relevant Cash Flows for a Project,the After-Tax

question 7

Multiple Choice

When compiling the relevant cash flows for a project,the after-tax value of any asset sold any time during the life of the project should be treated as a

• A)cash outflow at Time 0.
• B)change in net working capital.
• C)reduction in the cash flow for Time 0.
• D)cash flow in the last year of the project.
• E)cash flow in the year of sale.

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Definitions:

Boom-And-Bust Economic Cycles

Describes fluctuations in an economy where a period of rapid economic growth is followed by a period of sharp decline.

Market Economy

An economic system in which supply and demand guide the production and distribution of goods and services.

Imprisonment for Debt

The practice, now largely abolished, of jailing individuals who are unable to repay their debts.