All of the following are incremental cash flows attributable to the project except _____.

Question

Quizplus · Accepted Answer

Financing costs are not incremental cash flows attributable to the project because they represent the cost of obtaining financing to undertake the project, which is a separate financial decision and not directly related to the project's cash flows. Opportunity costs, substitutionary effects, and complementary effects, on the other hand, are all incremental cash flows that affect the project's profitability and value. Opportunity costs represent the value of the best alternative forgone when the project is chosen. Substitutionary effects refer to the impact of the project on the cash flows of existing operations or projects, which may be positive or negative. Complementary effects are the additional cash flows generated by the project when combined with existing operations or projects, creating a synergy effect.

All of the Following Are Incremental Cash Flows Attributable to the Project