What would cause the initial cash outlay of an investment decision to be affected by the sale of an existing asset?
A)If the investment decision is a replacement decision
B)If the asset being purchased is technologically superior
C)If the asset being sold has exceeded its MACR's recovery allowance period
D)All of the above
E)None of the above

Question

Quizplus · Accepted Answer

If the investment decision is a replacement decision, the initial cash outlay would be affected by the sale of an existing asset. This is because the sale of the existing asset would generate cash inflows, which would be subtracted from the cost of the new investment to determine the net initial cash outlay.

What Would Cause the Initial Cash Outlay of an Investment