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29 July, 11:04

All of the following are related to a proposed project. Which one of these should be included in the cash flow at Time 0?

A) Loan obtained to finance the project

B) Initial investment in inventory to support the project

C) Annual depreciation tax shield

D) Aftertax salvage value

E) Net working capital recovery

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  1. 29 July, 11:21
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    Answer: The correct answer is Choise A.

    Explanation: When you create a cash flow you need to only include current cash inflows and outflows. Of the options that are available, the only one of the choices that would be included in the cash flow at start up is the initial loan obtained to finance the project.
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