One Purpose of Identifying All the Incremental Cash Flows Related

question 72

Multiple Choice

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

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

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