Which of the Following Cash Flows Should Be Treated as Incremental

question 49

Multiple Choice

Which of the following cash flows should be treated as incremental flows when deciding whether to go ahead with a new pharmaceutical drug?

• A) The cost of research and development undertaken for developing the new drug in the past five years
• B) The annual accounting depreciation charge
• C) The increase in taxes resulting from the depreciation charges
• D) None of the above

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Definitions:

Explicit Bias

Conscious or deliberate prejudice toward particular groups or individuals based on race, gender, age, or other characteristics.

Just-world Phenomenon

A cognitive bias leading individuals to believe that the world is fundamentally fair, thus people get what they deserve.

Scapegoat Theory

A concept in social psychology that suggests individuals or groups are unfairly blamed for problems not of their making.

Blame-the-victim Dynamic

A social phenomenon where the victim of a crime or harmful act is held entirely or partially at fault for what happened to them.