Question

In: Finance

Which of the following is/are considered as relevant cash flow(s) for a project concerning the manufacturing...

Which of the following is/are considered as relevant cash flow(s) for a project concerning the manufacturing and marketing of a new product?

Group of answer choices

a. The use of the firm's building that is currently vacant but can be sold at the market price.

b. Both cash dividends and interest payments distributed by the firm to its common shareholders.

c. Revenues from other product lines that will be lost as a result of some existing customers switching to the new product.

d. All of the above statements are correct.

e. Only a and c are correct.

Solutions

Expert Solution

option c is correct option. Revenues from other product lines that will be lost as a result of some existing customers switching to the new product.

Option a is incorrect option. Vacant building is not part of operations, hence cash flow from sales of building is not part of operation.
Option b is incorrect option dividend and interest payments are part of financial cash flows.

jeff jeffy answered 2 years ago
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