Tax Shield of Depreciation
After-tax Operating Profits
Raising of Funds
Both A and B
Answer is Right!
Answer is Wrong!
The correct answer is: Both A and B.
Cash inflows from a project include:
- Tax Shield of Depreciation. Depreciation is a non-cash expense that reduces taxable income. This results in a tax shield, which is a reduction in the amount of taxes that a company pays. The tax shield of depreciation is a cash inflow because it reduces the amount of cash that a company pays in taxes.
- After-tax Operating Profits. After-tax operating profits are the profits that a company makes after accounting for taxes. These profits are a cash inflow because they represent the amount of cash that a company has available to use.
Raising of Funds is not a cash inflow from a project. Raising funds is an expense that a company incurs when it borrows money or issues equity. This expense reduces the amount of cash that a company has available to use.
Therefore, the correct answer is: Both A and B.