Which of the Following Is Not a Relevant Cash Flow

question 93

Multiple Choice

Which of the following is not a relevant cash flow in capital budgeting?

• A)after-tax cash flow from current disposal of old asset
• B)after-tax cash flow from future disposal of asset at life's end
• C)after-tax cash flow from accumulated depreciation
• D)initial asset investment of the replacement machine
• E)after-tax annual cash flows relating to the new asset

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Definitions:

Preferred Shares

A type of stock that provides a fixed dividend before any dividends are paid to common stockholders and often carries no voting rights.

Basic Earnings

The net income divided by the weighted average number of shares outstanding, representing a company's earnings per share without any adjustments.

Common Shares

Equity securities that represent ownership interests in a corporation, providing voting rights and potential dividends to shareholders.

Preferred Shares

A class of ownership in a corporation with a fixed dividend, that has priority over common shares in the distribution of dividends and assets.