Which One of the Following Would NOT Result in Incremental

question 32

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 research and development 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:

Unconscious Cognitive Processes

Mental operations beyond conscious awareness that influence perceptions, judgments, and actions without one’s realization.

Rational

Pertaining to reasoning or logical thinking; often involves making decisions based on reason rather than emotions.

Emotional

Pertains to feelings, moods, or affective states that are experienced by individuals, influencing behavior, thought processes, and well-being.

Unconscious

The part of the mind that contains thoughts, memories, and desires not currently in conscious awareness but that can influence behavior.