Relevant Cash Flows
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1) Which of the following should NOT be included as a cash flow in evaluating a new piece of equipment for manufacturing?
a) Portion of current fixed administrative overhead costs that will benefit the project
b) Salvage value of the equipment
c) Cost savings provided by the equipment
d) Reduction in production from other equipment if new equipment is put in place
e) all of the above should be included
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Solution Summary
This solution discusses the cash flows relevant to the decision to purchase a new piece of equipment.
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The portion of current fixed administrative overhead costs that will ...
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