In net present value analysis, an investment in equipment at the beginning of a project should be:
A) ignored.
B) included as a cash outflow.
C) included as a cash inflow.
D) included as a tax deduction.

Question

Quizplus · Accepted Answer

Investment in equipment at the beginning of a project should be included as a cash outflow in the net present value analysis, as it represents an upfront cost to the project. Ignoring it would result in an inaccurate analysis, while including it as a cash inflow or tax deduction would be incorrect.

In Net Present Value Analysis, an Investment in Equipment at the Beginning