The Shoe Box is considering adding a new line of winter footwear to its product lineup.Which of the following are relevant cash flows for this project?
I.Decreased revenue from products currently being offered if this new footwear is added to the lineup
II.Revenue from the new line of footwear
III.Money spent to date looking for a new product line to add to the store's offerings
IV.Cost of new counters to display the new line of footwear

Question

Quizplus · Accepted Answer

Decreased revenue from existing products (I) and revenue from the new line (II) are relevant as they affect overall sales. The cost of new counters (IV) is a direct expense for the project. Money already spent (III) is a sunk cost and not relevant.

The Shoe Box Is Considering Adding a New Line of Winter