The calculation of differential cash flows over a project's life should include which of the following?
A) Labor and material savings
B) Additional revenues attributable to the project
C) Investment in net working capital
D) All of the above

Question

Quizplus · Accepted Answer

Differential cash flows refer to the difference in cash flows between a project with and without the implementation of the project. Therefore, it should include all savings, revenues, and investments in net working capital that are attributable to the project. Thus, all of the choices A, B, and C are correct.

The Calculation of Differential Cash Flows Over a Project's Life