Which of the following is the best definition for incremental cash flows?
A) The difference between a firm's future cash flows with a project and without the project.
B) The portion of cash flows of a new project that come at the expense of a firm's existing operations.
C) The present value of a project's costs calculated on an annual basis.
D) Tax saving that results from the CCA deduction, calculated as depreciation multiplied by the corporate tax rate.
E) Evaluation of a project based on the project's incremental cash flows.
Correct Answer:
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