Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in expected future cash flows as a result of making the investment. The income taxes saved as a result of depreciation deductions are relevant because they decrease cash outflows, but the depreciation itself is a noncash item.TrueFalse: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in past cash flows that resulted from making previous investments.False: neither the income taxes saved as a result of depreciation deductions nor the depreciation itself is considered relevantboth B and Cnone of the above

Answered: Relevant cash inflows and outflows in a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in expected future cash flows as a result of making the investment. The income taxes saved as a result of depreciation deductions are relevant because they decrease cash outflows, but the depreciation itself is a noncash item.

True
False: Relevant cash inflows and outflows in a discounted cash flow analysis are the differences in past cash flows that resulted from making previous investments.
False: neither the income taxes saved as a result of depreciation deductions nor the depreciation itself is considered relevant
both B and C
none of the above

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