According to the Incremental Cash Flow Principle, a Firm Should

question 120

Multiple Choice

According to the incremental cash flow principle, a firm should:

• A)include variable costs and fixed costs.
• B)exclude variable costs and fixed costs in the project's cash flows.
• C)include variable costs and exclude fixed costs in the project's cash flows.
• D)include sunk costs in the project's cash flows.
• E)exclude opportunity costs in the project's cash flows.

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Definitions:

Benchmarking

In a search for excellence, taking the absolute best as a standard and trying to surpass it; objectively evaluating what an organization does compared with what its best competitors do and then taking steps to meet or exceed that high standard. Fundamental benchmark measures are product quality (what is produced) and service quality (how one deals with customers).

Criteria

Standards or rules by which something can be judged or decided.

Statesmanship

The ability to work with and through other people, based on mastery of human relations skills and use of the four-step method to solve problems; an important element of leadership performance.

Leadership Performance

The effectiveness with which a leader guides their organization or team towards achieving its goals.