Which of the Following Items Should Not Be Considered When

question 69

Multiple Choice

Which of the following items should not be considered when computing the terminal cash flow for an expansion project?

• A)a change in net working capital associated with the purchase of the project
• B)the selling price of the asset at the end of its life
• C)increases in cash sales that occur because the project is purchased
• D)taxes on the sale of the asset at the end of its life
• E)none of the above

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Definitions:

Infrequent Gain/Loss

Earnings or losses that arise from events that are not expected to recur regularly, distinguished from ordinary operational results.

Continuing Operations

The segments of a business expected to continue operating into the foreseeable future, excluding any discontinued operations.

Extraordinary Item

An unusual and infrequent gain or loss that is reported separately in the financial statements.

Early Retirement

The act of leaving one's job and stopping work before the typical age or requirement for pension eligibility has been reached.