To Correctly Project Cash Flows, We Need to Consider All

question 19

Multiple Choice

To correctly project cash flows, we need to consider all of the factors except _____.

• A) Use of assets or employees already employed by the firm
• B) The likely impact that the new service or product will have on the firm's existing products' cost and revenues
• C) The new product's or service's costs and revenues
• D) All of these are factors that need to be considered.

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Definitions:

Residual Income

The amount of income that an individual or company has after all operating expenses, including cost of goods sold and taxes, have been paid.

Division's Operations

The specific activities and functions carried out by a distinct business segment or department within an organization.

Major Corporation

A large and significant company, often leading or highly influential in its industry or sector.

Operating Assets

Assets used in the day-to-day operations of a business to generate revenue, including cash, inventory, and property, plant, and equipment.