The cash ﬂows of a new project that come at the expense of a ﬁrm's existing projects are called:

Question

Quizplus · Accepted Answer

The definition given in the question matches the concept of erosion costs, which are the cash flows that result from the introduction of a new product, service, or project that reduces the sales or cash flows of existing products, services, or projects. Therefore, the correct answer is E. Salvage value expenses refer to the cash flows generated from the sale of an asset at the end of its useful life. Net working capital expenses refer to the increase in investment in working capital required by a project. Sunk costs are costs that have already been incurred and cannot be recovered. Opportunity costs are the benefits foregone by choosing one alternative over another.

The Cash ﬂOws of a New Project That Come at the Expense