Relevant cash flows for a project are best described as
A) incremental cash flows.
B) sunk cash flows.
C) accounting cash flows.
D) incidental cash flows.

Question

Quizplus · Accepted Answer

Relevant cash flows for a project are those that will be directly affected by the implementation of the project and are therefore incremental to the current situation. Sunk cash flows are costs that have already been incurred and cannot be recovered, accounting cash flows are related to the reporting of financial information rather than actual cash inflows and outflows, and incidental cash flows are not directly related to the project and are therefore not relevant.

Relevant Cash Flows for a Project Are Best Described as