Description
What is an incremental cash flow for a project? What concepts do we need to examine to help understand how to estimate the incremental cash flow of a project? What else is needed for deciding whether or not to choose a project? 300 Words
Explanation & Answer
Attached.
Incremental cash flow – Outline
Thesis statement: Incremental cash flow is the additional cash inflows that a firm receive from
undertaking new investments.
I.
Important concepts in estimating cash flows
A. Sunk costs
B. Opportunity costs
C. Externalities
D. cannibalization
II.
Other factors to consider
A. Changes in net working capital
B. Risk factor of the project
Running head: INCREMENTAL CASH FLOW FOR A PROJECT
Incremental Cash Flow for a Project
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Institution
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INC...
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