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

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The cash flows of a new project that come at the expense of a firm's existing projects are called erosion costs. These costs represent the revenue that the firm loses from its existing products or services due to the introduction of the new project. Thus, option E is the best choice. The other options are not relevant to the given scenario because they refer to different types of costs. Salvage value expenses refer to the proceeds from selling an asset at the end of its useful life. Net working capital expenses refer to the initial investment needed to finance a project's working capital requirements. Sunk costs are the costs that have already been incurred and cannot be recovered. Opportunity costs refer to the benefits that a firm foregoes by choosing one alternative over another.

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