Relevant cash flows for a project are best described as ________.

Question

Quizplus · Accepted Answer

Incremental cash flows are the cash flows that are directly attributable to a specific project and would not occur if the project is not undertaken. These cash flows are relevant as they help in determining the profitability of the project and whether it should be undertaken or not. Incidental cash flows are not directly related to the project and occur irrespective of whether the project is undertaken or not. Sunk cash flows refer to the costs that have already been incurred and cannot be recovered. Contingent cash flows are uncertain and may or may not occur in the future.

Relevant Cash Flows for a Project Are Best Described as ________