A local bank is contemplating adding a new ATM to their lobby. They will need another phone line to provide communications that has a monthly cost of $50 per month. This is an example of:

Question

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This is an example of incremental cash flow because it is a potential cost that would be incurred as a result of adding the new ATM. Incremental cash flow refers to the additional cash flows that would be generated or expenses that would be incurred as a result of taking on a new project or investment. On the other hand, sunk costs are costs that have already been incurred and cannot be recovered, and complementary costs refer to costs that are required to make a project or investment feasible but are not directly related to the project itself.

A Local Bank Is Contemplating Adding a New ATM to Their