Section 5
Cash Flow Analysis and Other Factors
By Boundless
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Cash flow factors are the operational, financial, or investment activities which cause cash to enter or leave the organization.
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A replacement project is an undertaking in which the company eliminates a project at the end of its life and substitutes another investment.
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Sunk costs are retrospective costs that cannot be recovered, and are therefore irrelevant to future investment decisions in the project which incurs them.
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Opportunity cost refers to the value lost when a choice is made between two mutually exclusive options.
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An externality is an effect of an economic action, the cost or benefit of which is shouldered by someone outside the transaction.
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The tax rate is the amount of tax expressed as a percentage.
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Depreciation is the process by which an asset is used up, and its cost is allocated over a period of time.
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Section 179 of the IRS code allows some pieces of property to be expensed entirely when they are purchased, rather than depreciated.