Which of the Following Is NOT a Component of the Initial

question 2

Multiple Choice

Which of the following is NOT a component of the initial after-tax cash flow?

• A) The change in the net working capital requirements.
• B) The initial capital cost of the asset.
• C) The original cost of a capital asset that was incurred several years ago.
• D) The opportunity costs associated with the project.

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Definitions:

Share Issuance

The process by which a company issues new shares of stock to investors or shareholders, increasing the number of outstanding shares.

Share Buy-backs

The process by which a company purchases its own shares from the marketplace, reducing the amount of outstanding stock on its balance sheet.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having an ownership interest in the company.

Regulations

Rules and guidelines issued by governmental agencies to control or direct the conduct of activities.