Which of the Following Is the Best Definition for Incremental

question 324

Multiple Choice

Which of the following is the best definition for incremental cash flows?

• A) The difference between a firm's future cash flows with a project and without the project.
• B) The portion of cash flows of a new project that come at the expense of a firm's existing operations.
• C) The present value of a project's costs calculated on an annual basis.
• D) Tax saving that results from the CCA deduction, calculated as depreciation multiplied by the corporate tax rate.
• E) Evaluation of a project based on the project's incremental cash flows.