An important cash inflow in the analysis of initial cash flows for a replacement project is ________.

Question

Quizplus · Accepted Answer

The sale value of the old asset is an important cash inflow because it represents the cash the company will receive from selling the old asset. This cash inflow should be subtracted from the cost of the new asset and any installation costs to determine the net cash outflow associated with the replacement project. A and C are not cash inflows, and B represents a cash outflow.

An Important Cash Inflow in the Analysis of Initial Cash