Which of the following is NOT a relevant cash flow and thus should not be reflected in the analysis of a capital budgeting project? A) Changes in net working capital. B) Shipping and installation costs. C) Cannibalization effects. D) Opportunity costs. E) Sunk costs that have been expensed for tax purposes.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered, and thus should not be considered in capital budgeting decisions.

Which of the Following Is NOT a Relevant Cash Flow