In the process of capital budgeting, the incremental cash flow of the project is determined before the initial cost of the project.

Question

Quizplus · Accepted Answer

The initial cost of the project is one of the first items considered in capital budgeting, and it is included in the calculation of incremental cash flow. The incremental cash flow is the difference between the expected future cash flows with the project and the expected future cash flows without the project, taking into account the initial cost and any other relevant costs and revenues.

In the Process of Capital Budgeting, the Incremental Cash Flow