Question
Which of the following statements is correct? A firm has estimated that it will save $40,000 in utility expenses annually if it replaces an old
Which of the following statements is correct?
A firm has estimated that it will save $40,000 in utility expenses annually if it replaces an old machine with a new, more technologically advanced machine. The $40,000 is a relevant cash flow that should be included in the computation of the machine's supplemental operating cash flows. | ||
Inflation does not need to be considered in capital budgeting analyses. | ||
The tax deduction associated with a project's depreciation expense is not a relevant cash flow in capital budgeting analyses. | ||
The sunk costs associated with a project are relevant cash flows that should be included in capital budgeting analyses. |
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