Which of the Following Factors Should Be Included in the Cash

question 78

Multiple Choice

Which of the following factors should be included in the cash flows used to estimate a project's NPV?

• A) interest on funds borrowed to help finance the project.
• B) the end-of-project recovery of any working capital required to operate the project.
• C) cannibalization effects, but only if those effects increase the project's projected cash flows.
• D) expenditures to date on research and development related to the project, provided those costs have already been expensed for tax purposes.
• E) all costs associated with the project that have been incurred prior to the time the analysis is being conducted.

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Definitions:

FICA Taxes

Federal taxes in the United States collected to fund Social Security and Medicare, required deductions from employees’ paychecks.

Quarterly Federal Tax Return

A tax document filed four times a year by employers to report their employee's wages and the federal income and FICA taxes withheld.

FUTA Tax Return

A federal tax form required from employers to report and pay unemployment taxes to the Internal Revenue Service, associated with the Federal Unemployment Tax Act.

Wage And Tax Statement

A form, typically referred to as a W-2 form in the United States, that employers provide to employees detailing the employee's annual wages and the amount of taxes withheld from their paycheck.