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:

Cognitive Processes

Mental activities involved in acquiring, storing, retrieving, and using knowledge, including perception, memory, reasoning, and language.

Information Processing

This is the mechanism through which human beings intake, store, and retrieve information, akin to how computers process data.

Connectionist Paradigm

A theoretical approach in cognitive science that models mental or behavioral phenomena as the product of interconnected networks of simple units, often inspired by the neural architecture of the brain.

Metaphors

Linguistic expressions where a term or phrase is applied to an object or action to which it is not literally applicable, often to suggest a similarity or analogy.