Any changes to a firm's projected future cash flows that are caused by adding a new project are referred to as which one of the following?

Question

Quizplus · Accepted Answer

Incremental cash flows are the changes to a firm's projected future cash flows that occur as a result of adding a new project. These changes include the additional revenues and costs associated with the project and are incremental because they would not occur without the new project. Option A is incorrect because eroded cash flows refer to cash flows that are lost due to a new project. Option B is incorrect because deviated projections are not a commonly used term in financial analysis. Option D and E are also incorrect as they are not commonly used terms in finance.

Any Changes to a Firm's Projected Future Cash Flows That