Any increase in revenues brought about by a project less any increase in operating expenses and depreciation brought about by the project, multiplied by 1 - T), where T is the firm's marginal income tax rate, plus the incremental depreciation associated with the project is called the:
A) the present value of the project.
B) the internal rate of return of the project.
C) the net present value of the project.
D) net cash flow of the project.
E) profit of the project.

Question

Quizplus · Accepted Answer

This description outlines the calculation of net cash flow from a project. It considers the increase in revenues, subtracts the increase in operating expenses and depreciation, adjusts for taxes, and adds back the incremental depreciation, which is a non-cash expense.

Any Increase in Revenues Brought About by a Project Less