Net initial investment includes ________.
A) depreciation on new equipment, cash outflow for working capital, and after-tax cash inflow from disposal of the old equipment
B) cash outflow to purchase new equipment, depreciation on new equipment, and after-tax cash inflow from disposal of the old equipment
C) cash outflow to purchase new equipment, cash outflow for working capital, and after-tax cash inflow from disposal of the old equipment
D) cash outflow to purchase new equipment, cash outflow for working capital, and depreciation on new equipment

Question

Quizplus · Accepted Answer

Net initial investment includes the cash outflow to purchase new equipment, cash outflow for working capital, and after-tax cash inflow from disposal of the old equipment. It does not include depreciation on new equipment as it is a non-cash expense that is accounted for separately in financial statements.

Net Initial Investment Includes ________