Question

Sales proceeds from the asset sold at the time end of project forecasting period is treated as ________
1. Initial cash flow
2. Operating cash flow
3. Terminal cash flow
4. Regular cash flow

Answer 1

Sales proceeds from the Asset sold at the time and of project forecasting period is treated as terminal cash flow.

Answer 2

Sales proceeding from asset sold at end time of project forecasting period is known as Terminal Cash flow.

Explanation:

Sales proceeds from assets sold at time end of project forecasting period is treated as the terminal cash flow. Terminal cash flow are composed with two main components and these are

1. Proceed of disposing the project equipment’s.

2. Level of working capital before commencing the project.

Terminal cash flow is most important aspect of capital budgeting of particular project.