Relevant cash flows are:
A) Avoidable
B) Incremental
C) Both of the above
D) None of the above

Question

Quizplus · Accepted Answer

Relevant cash flows are both avoidable and incremental. Avoidable cash flows are costs that can be avoided if a project is not undertaken, while incremental cash flows are the additional cash flows that result from a project being undertaken. Relevant cash flows are those that are directly affected by a project and are therefore both avoidable and incremental.

Relevant Cash Flows Are