Which one of these represents a cash outflow for a project?
A) A sunk cost
B) Increase in accounts receivable
C) Depreciation
D) Accrued expenses

Question

Quizplus · Accepted Answer

Increase in accounts receivable represents a decrease in cash. When accounts receivable increase, it means the company has provided goods or services but has not yet received payment, resulting in a cash outflow. A sunk cost (A) is a cost that has already been incurred and cannot be recovered. Depreciation (C) is a non-cash expense that represents the decline in value of an asset over time. Accrued expenses (D) represent expenses that have been incurred but not yet paid, so they do not represent a cash outflow at the time they are accrued.

Which One of These Represents a Cash Outflow for a Project