Q509
Cash flows that should be considered for decision in hand are classified as
A.
relevant cash flows
AnswerB.
irrelevant cash flows
C.
marginal cash flows
D.
transaction cash flows
Answer: Option A
Solution
Answer: Option A
Solution:
Cash flows that should be considered for decision in hand are classified as relevant cash flows. It states that they must be cash flows that occur in the future and are incremental. While on the face of it obvious, only costs or revenues that give rise to a cash flow should be included.