Question

Jenkins plans to generate $650,000 of sales revenue if a capital project is implemented. Assuming a 30% tax rate, the sales revenue should be reflected in the analysis by a: $650,000 inflow. $455,000 outflow. $195,000 outflow. $455,000 inflow. $195,000 inflow.

Answer 1

$650,000 inflow

Step-by-step explanation:

Outflows are movement of cash out of the business which include the initial cost of the capital project being implemented which would be shown in the investment analysis with negative.

However, movement of cash into the business are inflows such as the sales revenue which would naturally attract a positive sign in the investment analysis,hence it is an inflow into the business,hence my choice of answer.