Which of the Following Is NOT Considered in the Calculation

question 36

Multiple Choice

Which of the following is NOT considered in the calculation of incremental cash flows?

• A) tax saving due to increased depreciation expense
• B) interest payments if new debt is issued
• C) increased dividend payments if additional preferred stock is issued
• D) B and C

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Definitions:

Accounting System

The methods and procedures used by a business to collect, classify, summarize, and report financial data for use by management and external users.

Voucher

A document representing an internal intent to make a payment to an external entity, detailing the specifics of the transaction.

Liability

A financial obligation or amount owed by a business to others, such as loans, accounts payable, or mortgages.

Money Orders

A payment order for a pre-specified amount of money; it functions as a form of prepaid payment instrument.