Which one of the following principles refers to the assumption that a project will be evaluated based on its incremental cash flows?

Question

Quizplus · Accepted Answer

The stand-alone principle states that a project should be evaluated based on its incremental cash flows, which are the additional cash flows generated by the project compared to the situation without the project. This means that only the cash flows directly related to the project should be considered, and any external factors that may affect the cash flows should be ignored. Therefore, the stand-alone principle is the correct choice in this scenario. The other principles listed are not relevant to the evaluation of a project's cash flows.

Which One of the Following Principles Refers to the Assumption