Which of the following items is NOT considered as a part of the net investment calculation?
A) the first year's net cash flow
B) increase in net working capital
C) salvage of an old piece of equipment that is being replaced
D) installation and shipping charges

Question

Quizplus · Accepted Answer

Net investment calculation only considers the initial investment required for an asset or project. Therefore, the first year's net cash flow, increase in net working capital, and installation and shipping charges are all included in the net investment calculation. However, salvage of an old piece of equipment is not considered as it is not a part of the initial investment required.

Which of the Following Items Is NOT Considered as a Part