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:

Compressed Workweek

A four-day (or shorter) period during which an employee works 40 hours.

Layoffs

The termination of employment of workers by an employer due to business reasons that may not be related to the individual's performance.

Four-day

Refers typically to a workweek that consists of four workdays as opposed to the traditional five, aimed at improving work-life balance or operational efficiency.

Job Enlargement

The addition of more tasks to a job instead of treating each task as separate.