Which Factor Is NOT Relevant When Determining Incremental Cash Flows

question 16

Multiple Choice

Which factor is NOT relevant when determining incremental cash flows for a new product?

• A)the land that would be used for the new project and could be sold to another firm
• B)revenues from an existing product that would be lost as a result of customers switching to the new product
• C)shipping and installation costs associated with preparing a machine that would be used to produce the new product
• D)the cost of a marketing study that was completed last year related to the new product (This research led to the tentative decision to go ahead with the new product, and the cost of the research was expensed for tax purposes last year.)

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Definitions:

Involuntary Turnover

The termination of employees from an organization for reasons beyond their control, such as layoffs or company downsizing.

Technical Support

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Merger Success

The successful integration and performance improvement following the merger of two companies.

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