Annual net cash flows are defined as

Question

Quizplus · Accepted Answer

Annual net cash flows are the difference between annual cash inflows and annual cash outflows. Depreciation expense is not included as it is a non-cash expense and does not affect the actual cash flows. Revenues minus expenses is the calculation of net income, which is different from net cash flows. Annual cash inflows minus capital investment is the calculation of the initial cash payback period, not the annual net cash flows.

Annual Net Cash Flows Are Defined as