Which of the following is a cash flow that might occur when new equipment is purchased?
A)Cash outflow for depreciation
B)Cash inflow in the form of cost savings
C)Cash outflow to pay the salvage value of the old equipment
D)Cash inflow for interest paid

Question

Quizplus · Accepted Answer

Purchasing new equipment may result in cost savings due to increased efficiency or reduced maintenance costs, leading to a cash inflow. A is incorrect because depreciation is a non-cash expense. C is incorrect because paying the salvage value occurs when disposing of old equipment, not when purchasing new equipment. D is incorrect because interest paid is a cash outflow, but it is not related to the purchase of new equipment.

Which of the Following Is a Cash Flow That Might