The first step in the capital budgeting process is the identification of the project's:

Question

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The identification of the project's incremental cash flows is the first step in the capital budgeting process. This involves analyzing the expected cash inflows and outflows of the project, taking into consideration any additional costs or revenue generated by the project, as well as any opportunity costs of not pursuing the project. This analysis provides the basis for determining the net present value, internal rate of return, and other financial metrics that are used to evaluate the project's potential profitability. The investment requirement (C) is an important component of the cash flow analysis, but it is not the first step in the process. The cost of capital (A) and overall cash flows (D) are important considerations in the evaluation of a project, but they are not the first step in the process.

The First Step in the Capital Budgeting Process Is the Identification