Which of the following is not a typical cash flow related to equipment purchase and replacement decisions?
A) Increased operating costs
B) Overhaul of equipment
C) Salvage value of equipment when project is complete
D) Depreciation expense

Question

Quizplus · Accepted Answer

Depreciation expense is not a cash flow but an accounting entry used to allocate the cost of a tangible asset over its useful life. Cash flow analysis focuses on actual cash inflows and outflows, not accounting allocations like depreciation.

Which of the Following Is Not a Typical Cash Flow