If a project requires a plant addition that replaces an existing structure, then the cash inflow from the disposal of the existing structure must be counted as part of the project's initial outlay.

Question

Quizplus · Accepted Answer

The cash inflow from the disposal of the existing structure represents a reduction in the initial outlay required for the project, and should be accounted for as such.

If a Project Requires a Plant Addition That Replaces an Existing