Explore BrainMass

Explore BrainMass

    Incremental cash flow-capital budgeting

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Which one of the following does NOT have incremental cash flow effects and thus should not be considered in a capital budgeting decision for a new project?

    a) a firm has a parcel of land that can be used for a projects new plant site, be sold, or be used for agricultural purposes
    b) a new product will generate new sales, but some of those new sales will be from customers who switch from one of the firms current products
    c) a firm can produce a new product, and the existence of that product will stimulate the sales of some of the firm's other products
    d) if the project is accepted, the company must inititally invest $2 million in working capital. However, these funds will be recovered at the end of the projects life?
    e) A firm can produce a new product, and the existence of that product will stimulate sales for the firms competitors.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:22 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/incremental-cash-flow-capital-budgeting-275886

    Solution Preview

    Which one of the following does NOT have incremental cash flow effects and thus should not be considered in a capital budgeting decision for a new project?

    a) a firm has a parcel of land that can be used for a projects new plant site, be sold, or be used for agricultural purposes
    b) a new product will generate new sales, but some of those new sales will be from customers who switch from one of the firms current products
    c) a firm can produce a new product, and the existence of that product will stimulate the sales of some ...

    Solution Summary

    Answers a multiple choice question on incremental cash flow in capital budgeting decision.

    $2.19

    ADVERTISEMENT