All of the following would be used in the computation of an investment's initial investment EXCEPT
A) the annual after tax inflow expected from the investment.
B) the initial purchase price of the investment.
C) the resale value of an old asset being replaced.
D) the tax on the sale of an old asset being replaced.

Question

Quizplus · Accepted Answer

The annual after tax inflow is used in the computation of the investment's cash inflows, but not in the computation of the initial investment. The initial investment is simply the amount of money required to make the purchase, which is determined by the initial purchase price of the investment and any costs associated with disposing of an old asset or acquiring financing.

All of the Following Would Be Used in the Computation