A Local Bank Is Contemplating Opening a New Branch Bank

A local bank is contemplating opening a new branch bank in a large superstore across town from their main office. It is estimated that the new branch will generate $20,000 after expenses each month. The manager wonders if all these revenues should be considered an incremental cash flow. Given this information, which of the following statements is correct?

A) $20,000 is generated by the new branch bank and therefore it is an incremental cash flow.
B) We would first need to assess the opportunity cost of placing a branch in a different location to answer this question.
C) Some amount less than the $20,000 is incremental because of substitutionary effects.
D) Some amount less than the $20,000 is incremental because of complementary effects.