Any cash flows that can be classified as incremental to a particular project-i.e.,results directly from the decision to undertake the project-should be reflected in the capital budgeting analysis.

Question

Quizplus · Accepted Answer

This statement is true. Incremental cash flows are the additional cash flows that a project generates and are directly associated with the decision to undertake the project. These cash flows should be considered in the capital budgeting analysis because they reflect the true costs and benefits of the project. Therefore, any cash flows that are not incremental should be excluded from the analysis.

Any Cash Flows That Can Be Classified as Incremental to a Particular