When computing the total cash outflow needed to start a project,we must include ________.
A)any change in net income
B)any change in working capital
C)any change in dividends
D)any change in earnings

Question

Quizplus · Accepted Answer

Any change in working capital, which includes cash, accounts receivable, inventory, and accounts payable, must be included in the total cash outflow needed to start a project. This is because changes in working capital affect the amount of cash available to the company and therefore impact the project's cash flow. Changes in net income, dividends, and earnings may not necessarily impact the cash outflow needed to start a project.

When Computing the Total Cash Outflow Needed to Start a Project,we