Question

Analyze some examples of relevant and irrelevant Cash Flows for one Saudi Company?

Analyze some examples of relevant and irrelevant Cash Flows for one Saudi Company?

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Answer:

There are relevant and irrelevant things in Cash Outflow of a Saudi Company.

Examples of Relevant Cash Out flow is as per the following :

  • Variable Labor costs
  • Variable Material costs
  • Extra Fixed Overhead costs
  • Cost of the Investments
  • Marginal Taxes

Examples of Irrelevant Cash Out flow is as per the following:

  • Fixed Overheads costs (Existing)
  • Sunc Costs

The relevant cash in flow and cash out flow is legitimately related with the investment and cost of speculation. Irrelevant things like fixed overheads isn't relevant in light of the fact that it will stay fixed whether proposition will be acknowledged or not acknowledged.

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