For the case of an electric car project, which of the following costs or cash flows should be categorized as incremental when analyzing whether to invest in the project?
A)The cost of research and development undertaken for developing the electric car during the past three years
B)The annual depreciation charge
C)Tax savings resulting from the depreciation charges
D)Dividend payments

Question

Quizplus · Accepted Answer

Tax savings resulting from the depreciation charges are considered incremental because they directly affect the cash flows of the project and are a result of the investment decision.

For the Case of an Electric Car Project, Which of the Following