Raliegh, a nonprofit organization, estimates that it can save $23,000 a year in cash operating costs for the next 8 years if it buys a special-purpose eye-testing machine at a cost of $90,000. No terminal disposal value is expected. required rate of return is 10%. Assume all cash flows occur at year-end except for initial investment amounts. Raliegh uses straight-line depreciation. b. Payback period c. Internal rate of return d. Accrual accounting rate of return based on net initial investment e. Accrual accounting rate of return based on average investment

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Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.