Mauldin Welding Shop Is Considering the Purchase of New High-Tech

Multiple Choice

Mauldin Welding Shop is considering the purchase of new high-tech welding equipment.If the equipment is purchased, Mauldin will incur an additional $8,000 in annual depreciation expense for the next five years.In determining the cash flows associated with the new equipment, the $8,000 of annual depreciation expense is

A) a cash outflow.
B) a cash inflow.
C) a sunk cost.
D) ignored in the cash flow analysis.