Question
Select all that apply
Typical capital budgeting cash outflows include Blank______.
Multiple select question.
cost reductions
initial equipment investments
salvage value of old equipment
installation costs
working capital invested
Typical capital budgeting cash outflows include Blank______.
Multiple select question.
cost reductions
initial equipment investments
salvage value of old equipment
installation costs
working capital invested
Answers
GPT-4o mini
In typical capital budgeting, cash outflows can include:
1. **Initial equipment investments** - This is the initial outlay required to purchase fixed assets.
2. **Installation costs** - These are the costs associated with getting the equipment up and running.
3. **Working capital invested** - This refers to the amount of money tied up in current assets required to operate the project.
So, the correct selections are:
- Initial equipment investments
- Installation costs
- Working capital invested
**Cost reductions** and **salvage value of old equipment** would typically be considered cash inflows rather than cash outflows for capital budgeting purposes.
1. **Initial equipment investments** - This is the initial outlay required to purchase fixed assets.
2. **Installation costs** - These are the costs associated with getting the equipment up and running.
3. **Working capital invested** - This refers to the amount of money tied up in current assets required to operate the project.
So, the correct selections are:
- Initial equipment investments
- Installation costs
- Working capital invested
**Cost reductions** and **salvage value of old equipment** would typically be considered cash inflows rather than cash outflows for capital budgeting purposes.