Which of the Following Is the Best Example of an Incremental

question 108

Multiple Choice

Which of the following is the best example of an incremental cash inflow/outflow?

• A)Cash flows that are achieved by diverting sales from other projects of the firm
• B)Cash flows that are associated with the financing of a project
• C)Cash flows that occur a little at a time
• D)Cash flows that occur only if the project is taken

---

Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained rather than distributed to shareholders or owners as dividends.

Net New Equity

The amount of equity capital a company raises through the issuance of new shares minus any shares it has bought back, reflecting the net increase in share capital.

Non-Cash Items

Expenses or incomes recorded in accounting but do not involve any actual cash flow, such as depreciation, amortization, or stock-based compensation.

Capital Spending

Expenditures by a company for physical assets like property, industrial buildings, or equipment.