Which of the following is not considered a relevant factor in estimating the incremental cash flows of a proposed capital project?
A)Pre-startup expenditures
B)Financing costs
C)Incremental working capital requirements
D)Taxes on incremental expenses and earnings

Question

Quizplus · Accepted Answer

Financing costs are not considered a relevant factor in estimating incremental cash flows of a proposed capital project because they represent a cost of financing rather than a cost of the project itself. The relevant factors in estimating incremental cash flows include pre-startup expenditures, incremental working capital requirements, and taxes on incremental expenses and earnings.

Which of the Following Is Not Considered a Relevant Factor