Which of the Following Cash Flows Are NOT Considered in the Calculation

question 67

Multiple Choice

Which of the following cash flows are NOT considered in the calculation of the initial outlay for a capital investment proposal?

• A)Training expense
• B)Working capital investments
• C)Installation costs of an asset
• D)Before-tax selling price of old machine

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Definitions:

Accumulated Depreciation

The total depreciation amount charged to date on a company's fixed assets, reflecting the asset’s use and age.

Depreciable Asset

A long-term asset that decreases in value over time due to usage and wear and tear.

Book Value

The net value of an asset as recorded on the balance sheet, calculated by subtracting the accumulated depreciation from the asset's original cost.

Unearned Ticket Revenue

Money received from ticket sales before the event or services have been provided; considered a liability until the service is rendered.