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Indicate Whether Each of the Following Statements Is True or False

Question 134

Short Answer

Indicate whether each of the following statements is true or false.
1. In analysis of a capital investment, a cost saving is treated as a cash inflow.
2. The expected salvage value of an asset is a source of a cash outflow that should be considered in capital investment analyses.
3. Many capital investments require an increase in the amount of a company's working capital.
4. Incremental revenues are treated as cash outflows in capital investment analyses.
5. An increase in working capital, which may occur near the beginning of a capital investment project, is treated as a cash outflow.

Correct Answer:

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1. True
2....

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