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

question 31

Multiple Choice

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

• A)Increase in accounts receivable
• B)The cost of shipping new equipment
• C)The cost of market research already spent on the project
• D)The cost of installing new equipment

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Definitions:

Product Time to Market

The duration it takes for a product to move from conception to being available for sale to consumers.

Return on Assets

A financial ratio that indicates the profitability of a company in relation to its total assets.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Net Income

Refers to the total earnings or profit of a company after subtracting all expenses from its total revenue.