One Purpose of Identifying All of the Incremental Cash flOws

question 44

Multiple Choice

One purpose of identifying all of the incremental cash flows related to a proposed project is to:

• A)isolate the total sunk costs so they can be evaluated to determine if the project will add
• Value to the firm.
• B)eliminate any cost which has previously been incurred so that it can be omitted from the
• Analysis of the project.
• C)make each project appear as profitable as possible for the firm.
• D)include both the proposed and the current operations of a firm in the analysis of the
• Project.
• E)identify any and all changes in the cash flows of the firm for the past year so they can be
• Included in the analysis

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