Question 12 1.5 pts Which of the following is NOT considered a relevant cash flo

Question

Question 12 1.5 pts Which of the following is NOT considered a relevant cash flow for a project concerning the manufacturing and marketing of a new product? O a. Principal repayments on bonds that are used in financing the company O b. Tax effect of depreciation expenses associated with the equipment used in the project. O c. The use of the firm's building that is currently vacant but can be sold at the market price. O d. Revenues from other product lines that will be lost as a result of some existing customers switching to the new product.

Explanation / Answer

option (a) .principal repayments on bonds that are used to finance company,are not relevant cash flows for a project because,it relates to source of funds.If manufacture a new product or same old product,if you require same amount of funds,repayment of bonds remains same irrespective of what product you choose to manufacture.so such cashflows are irrelevant cash flows.

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