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

Question

Quizplus · Accepted Answer

Erosion costs are the cash flows of a new project that come at the expense of a firm's existing projects. These costs are different from opportunity costs, which are the benefits foregone from choosing one option over another. Net working capital expenses refer to changes in a company's working capital requirements, while salvage value expenses refer to the proceeds from selling an asset at the end of its useful life. Sunk costs are costs that have already been incurred and cannot be recovered.

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