The term incremental in the context of incremental after-tax free cash flows refers to the fact that the firm's total after-tax free cash flows will change if the new project is adopted.

Question

Quizplus · Accepted Answer

The term incremental means that the change in after-tax free cash flows is measured by comparing the firm's cash flows with and without the new project. Therefore, the firm's total after-tax free cash flows will be affected if the new project is adopted, making option A true.

The Term Incremental in the Context of Incremental After-Tax Free