The Incremental Cash Flow from Projects for a Company Is

question 40

Multiple Choice

The incremental cash flow from projects for a company is computed as the:

• A) net operating cash flow generated by the project, less any sunk costs and erosion costs.
• B) sum of the incremental operating cash flow and after-tax salvage value of the project.
• C) net income generated by the project, plus the annual depreciation expense.
• D) sum of the incremental operating cash flow, capital spending, and change in net working capital of the project.
• E) sum of the sunk costs, opportunity costs, and erosion costs of the project.

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Definitions:

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