Which One of the Following Would NOT Result in Incremental

question 10

Multiple Choice

Which one of the following would NOT result in incremental cash flows and thus should NOT be included in the capital budgeting analysis for a new product?

• A) A firm has a parcel of land that can be used for a new plant site or be sold, rented, or used for agricultural purposes.
• B) A new product will generate new sales, but some of those new sales will be from customers who switch from one of the firm's current products.
• C) A firm must obtain new equipment for the project, and $1 million is required for shipping and installing the new machinery.
• D) A firm has spent $2 million on R&D associated with a new product. These costs have been expensed for tax purposes, and they cannot be recovered regardless of whether the new project is accepted or rejected.
• E) A firm can produce a new product, and the existence of that product will stimulate sales of some of the firm's other products.

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Definitions:

Training

An organization's planned efforts to help employees acquire job-related knowledge, skills, abilities, and behaviors, with the goal of applying these on the job.

Learning Organization

An organization that actively encourages, facilitates, and utilizes the learning of its members to continuously transform itself for better performance and innovation.

Human Resources

The department within an organization responsible for hiring, administering employee benefits, and managing employee relations and training.

Employee Satisfaction

A measure of how happy or content employees are with their jobs and work environment.