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.

---

Definitions:

Engagement

The emotional and psychological commitment an employee has to their job and organization, often leading to higher levels of productivity and satisfaction.

Classical Managerial

Pertaining to the early theories of management that emphasized the rationality and efficiency of organizations through principles of planning, organizing, commanding, coordinating, and controlling.

Employees' Nature

Refers to the inherent characteristics, behaviors, and attitudes of individuals within a workplace, affecting how they interact and contribute to organizational goals.

Human Relations Approach

A management strategy focusing on the importance of interpersonal relationships, employee needs, and morale in the workplace.