A conventional cash flow pattern associated with capital investment projects consists of an initial
A) outflow followed by a broken cash series.
B) inflow followed by a broken series.
C) outflow followed by a series of inflows.
D) inflow followed by a series of outflows.

Question

Quizplus · Accepted Answer

The conventional cash flow pattern associated with capital investment projects typically starts with an initial outflow (investing in the project) followed by a series of inflows (revenues or cost savings generated by the project). This is known as a "conventional" pattern because it is the most common cash flow pattern for capital investment projects. Option A is incorrect because a "broken cash series" is not a conventional pattern. Option B is incorrect because it starts with an inflow, which is not typical for capital investment projects. Option D is incorrect because it implies that the project generates more outflows than inflows, which is not a desirable outcome for an investment project.

A Conventional Cash Flow Pattern Associated with Capital Investment Projects