When a Company Is Analyzing a Capital Project by a Discounted-Cash-Flow

question 42

Multiple Choice

When a company is analyzing a capital project by a discounted-cash-flow approach and income taxes are being considered, depreciation:

• A) should be ignored.
• B) should be considered because it results in a tax savings.
• C) should be considered because it is a fixed cost.
• D) should be considered because it is a cash inflow.
• E) should be considered because, like other expenses, it is a cash outlay related to operations.

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Tools coated with ink to imprint designs, texts, or symbols on surfaces, often used for official or decorative purposes.