Cash flows used in net present value and internal rate of return analyses ignore ________.

Name: Cash flows used in net present value and internal rate of return analyses ignore ________.
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Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash charge and therefore is ignored in cash flow calculations used for net present value (NPV) and internal rate of return (IRR) analyses. These analyses focus on actual cash inflows and outflows rather than accounting charges like depreciation.

Cash Flows Used in Net Present Value and Internal Rate