Which of the following are examples of an incremental cash ﬂow? I.An increase in trade receivables.
II)A decrease in net working capital.
III)An increase in taxes.
IV)A decrease in the cost of goods sold.

Question

Quizplus · Accepted Answer

Incremental cash flows refer to the additional cash flows a company expects to generate from a particular investment or project. All the options listed (I, II, III, IV) represent changes in cash flows due to a new project or investment: I) An increase in trade receivables affects cash flow; II) A decrease in net working capital usually frees up cash; III) An increase in taxes affects cash outflows; IV) A decrease in the cost of goods sold improves cash flow by reducing expenses.

Which of the Following Are Examples of an Incremental Cash