Any Cash Flows That Can Be Classified as Incremental to a Particular

question 34

True/False

Any cash flows that can be classified as incremental to a particular project⎯i.e., results directly from the decision to undertake the project⎯should be reflected in the capital budgeting analysis.

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Definitions:

Normative

Relating to or dealing with norms, especially in the sense of prescribing what ought to be rather than describing what is.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Positive Economic Statement

A factual claim about the world that can be tested and validated, referring to what is, rather than what ought to be.

Normative

Normative relates to an ideal standard or model, often reflecting opinions about what is desirable or how things should be, especially in ethics and economics.