Which of the following cash flows are NOT considered in the calculation of the initial outlay for a capital investment proposal?
A)Training expense
B)Working capital investments
C)Installation costs of an asset
D)Before-tax selling price of old machine

Question

Quizplus · Accepted Answer

The before-tax selling price of the old machine is not considered in the calculation of the initial outlay for a capital investment proposal. The initial outlay includes the cost of acquiring the new asset, installation costs, working capital investments, and training expenses. The before-tax selling price of the old machine is a separate cash flow that affects the after-tax cash flows of the project but is not directly part of the initial outlay.

Which of the Following Cash Flows Are NOT Considered in the Calculation