IMANET Exam CMA Topic 6 Question 105 Discussion

Actual exam question for IMANET's CMA exam

Question #: 105
Topic #: 6

Which of the following is irrelevant in projecting the cash flows of the final year of a capital project?

ACash devoted to use in project.

BDisposal value of equipment purchased specifically for project

CDepreciation tax shield generated by equipment purchased specifically for project.

DHistorical cost of equipment disposed of in the projects first year.

Show Suggested Answer

Suggested Answer: D

Once an old piece of equipment has been disposed of, its histoncal cost no longer has an impact on a firms cash flows.

by Tamera at Jan 10, 2025, 03:35 AM

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10 days ago

I think the answer is D.

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10 days ago

D) Historical cost of equipment disposed of in the projects first year. That's clearly irrelevant since we're projecting the final year's cash flows.

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