When computing the net present value of a project, the net amount received from salvaging the fixed assets used in the project is:
A) Subtracted from the initial cash outlay.
B) Included in the final cash flow of the project.
C) Excluded from the analysis since it occurs only when the project ends.
D) Subtracted from the original cost of the assets.
E) Added to the net present value of the project to determine if the project is acceptable.

Question

Quizplus · Accepted Answer

The net amount received from salvaging the fixed assets at the end of a project is included in the final cash flow of the project. This is because it represents a cash inflow that occurs at the end of the project's life, affecting the overall net present value calculation.

When Computing the Net Present Value of a Project, the Net