(Solved):A cash flow that arises solely from a project that is being evaluated and hence should be…

 

Question

A cash flow that arises solely from a project that is being evaluated and hence should be included in the project analysis is known as:

a- Accounting Income

b- Incremental Cash Flows

c- Project Life

d- Opportunity Cost e-Sunk Cost

 

EXPERT ANSWER

The answer is b- Incremental Cash Flows

Incremental Cash Flows are the cash flows arising from choosing a certain alternative. It is a future cost that makes it different from opportunity cost. Opportunity cost

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