The difference between a company's future cash flows if it accepts a project and the company's future cash flows if it does not accept the project is referred to as the project's:

Question

Quizplus · Accepted Answer

Incremental cash flows represent the difference between the cash flows a company will receive if they go ahead with the project versus if they don't. Therefore, the answer is A. Internal and external cash flows refer to the sources of cash for the company from operations and outside sources, respectively. Erosion effects refers to revenue lost by an existing product or service when a new one is introduced. Financing cash flows refer to cash inflows and outflows related to financing activities such as raising capital or repaying debt.

The Difference Between a Company's Future Cash Flows If It