Only the incremental after-tax cash flows associated with a capital project are relevant in capital budgeting.

Name: Only the incremental after-tax cash flows associated with a capital project are relevant in capital budgeting.
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Question

Quizplus · Accepted Answer

Only the incremental after-tax cash flows are relevant in capital budgeting as they represent the change in cash flows that result from the capital project. Any sunk costs or non-incremental cash flows should not be included in the analysis.

Only the Incremental After-Tax Cash Flows Associated with a Capital