Which of the Following Items Has No After-Tax Consequences in the Analysis

question 93

Multiple Choice

Which of the following items has no after-tax consequences in the analysis of a capital investment proposal?

• A) Cash flow from operations.
• B) Salvage value of an existing asset that would be sold.
• C) Employee severance compensation.
• D) Reduction of net working capital at the termination (expiration) of the proposed project.
• E) Gain or loss on the disposal of the investment at the end of its useful life.

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Definitions:

Supplies Expense

The cost recognized in the accounting period for supplies used, regardless of when the supplies were purchased.

Landscaping Revenue

Income generated from services related to the modification, maintenance, and beautification of outdoor landscapes.

Equity Offerings

The process of issuing new shares of stock to raise capital from public investors.

Debt Offerings

The issuance of debt instruments by an entity to raise capital through borrowing from investors.