One Purpose of Identifying All of the Incremental Cash Flows

question 29

Multiple Choice

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

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

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Definitions:

Retail Business

Enterprises that sell goods directly to consumers, typically through physical stores or online platforms, involving direct interaction with end-users.

Business Revenues

The income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Obtain Resources

The act of securing the assets, finances, or materials required by a business or organization to operate and achieve its objectives.

Corporation

A legal entity that is separate and distinct from its owners, capable of owning property, carrying on business, and suing or being sued.