ABC Engineering just purchased a new machine. All of the following are examples of incremental cash flows EXCEPT

Question

Quizplus · Accepted Answer

Developmental costs to determine which machine would best work with their unique process are considered sunk costs, not incremental cash flows, because they are costs that have already been incurred regardless of the decision to purchase the new machine. Incremental cash flows are the additional cash flows a company will receive or pay out as a direct result of the decision to undertake a new project, such as purchasing a new machine.

ABC Engineering Just Purchased a New Machine