Which One of the Following Would NOT Result in Incremental

question 52

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) Using some of the firm's high-quality factory floor space that is currently unused to produce the proposed new product.This space could be used for other products if it is not used for the project under consideration.
• B) Revenues from an existing product would be lost as a result of customers switching to the new product.
• C) Shipping and installation costs associated with a machine that would be used to produce the new product.
• D) The cost of a study relating to the market for the new product that was completed last year.The results of this research were positive,and they led to the tentative decision to go ahead with the new product.The cost of the research was incurred and expensed for tax purposes last year.
• E) It is learned that land the company owns and would use for the new project,if it is accepted,could be sold to another firm.

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Definitions:

Postmodern City

Is a new urban form that is more privatized and socially and culturally fragmented and globalized than the corporate city.

Subcultures

Groups within a larger culture that distinguish themselves through unique beliefs, values, and practices.

Lifestyles

The aggregate of choices, behaviors, and habits of an individual or group, including consumption patterns, leisure activities, and values, which reflect socio-economic status and preferences.

Fragmentation

The process or state of breaking or being broken into small or separate parts.