Initial cash flows and subsequent operating cash flows for a project are sometimes referred to as
A) necessary cash flows.
B) relevant cash flows.
C) consistent cash flows.
D) ordinary cash flows.

Question

Quizplus · Accepted Answer

Initial cash flows and subsequent operating cash flows for a project are relevant cash flows because they are directly related to the decision-making process regarding the project. The term "relevant" refers to cash flows that will be affected by the project and are therefore important to consider when evaluating the feasibility of the project. The other options (A, C, and D) do not accurately describe the nature of these cash flows.

Initial Cash Flows and Subsequent Operating Cash Flows for a Project