Cash inflows from a capital investment may include the salvage value of capital assets and increases in revenues.

Question

Quizplus · Accepted Answer

Cash inflows from a capital investment may include the salvage value of capital assets, which is the estimated value of the assets at the end of their useful life. In addition, capital investments may also result in increases in revenues due to improved efficiency, higher production capacity, or other factors. Therefore, both salvage value and increased revenues can be sources of cash inflows from a capital investment.

Cash Inflows from a Capital Investment May Include the Salvage