The Incremental Cash Flow Principle Claims That Sunk Costs Must

question 157

True/False

The incremental cash flow principle claims that sunk costs must be taken into account in the firm's decision whether to accept or reject a project.

---

Definitions:

Additional Coffee

An increment in the quantity of coffee, considered as an example of a product or commodity in economic studies.

Marginal Utility

The additional joy or advantage obtained from using one more unit of a good or service.

Diminishing

A principle that refers to a decrease or reduction in the effectiveness, value, or quantity of something over time or under certain conditions.

Additional Unit

An incremental quantity of a product or service, typically considered in the context of production or consumption.