can identify the cash costs and cash inflows to a company that will result from a project These could be called "direct inflows and outflows," and the net difference is the direct net cash flow If there are other costs and benefits that do not flow from or to the firm, but to other parties, these are called externalities, and they need not be considered as a part of the capital budgeting analysis.

Question

Quizplus · Accepted Answer

Externalities should be considered in capital budgeting as they can impact the overall value and feasibility of a project, affecting stakeholders beyond the company itself.

Can Identify the Cash Costs and Cash Inflows to a Company