Opportunity costs should be included as cash outflows when determining a project's incremental cash flows.

Question

Quizplus · Accepted Answer

Opportunity costs represent the benefits foregone from choosing one alternative over another. These costs should be accounted for as cash outflows because they represent a real cost incurred by choosing a particular project or investment. Ignoring opportunity costs can lead to incorrect or incomplete assessments of a project's profitability and value.

Opportunity Costs Should Be Included as Cash Outflows When Determining