How are the following items used in the calculation of the net present value of a proposed project? (Ignore income tax considerations.)
$$\begin{array} { | l | l | }
\hline \text { Depreciatim Expense } & \text { Salvage Value } \
\hline \text { A) Include } & \text { Include } \
\hline \text { B) Include } & \text { Exclude } \
\hline \text { C) Exclude } & \text { Include } \
\hline \text { D) Exclude } & \text { Exclude } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Question

How are the following items used in the calculation of the net present value of a proposed project? (Ignore income tax considerations.)
$$\begin{array} { | l | l | } 
\hline \text { Depreciatim Expense } & \text { Salvage Value } \
\hline \text { A) Include } & \text { Include } \
\hline \text { B) Include } & \text { Exclude } \
\hline \text { C) Exclude } & \text { Include } \
\hline \text { D) Exclude } & \text { Exclude } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Quizplus · Accepted Answer

Depreciation expense is not included in the calculation of net present value because it is a non-cash expense. However, the salvage value is included as it represents a future cash inflow at the end of the project's life.

How Are the Following Items Used in the Calculation of the Net