Incremental Cash Flows
Incremental Cash Flows. A corporation donates a valuable painting from its private collection to an art museum. Which of the following are incremental cash ﬂows associated with the donation?
a. The price the ﬁrm paid for the painting.
b. The current market value of the painting.
c. The deduction from income that it declares for its charitable gift.
d. The reduction in taxes due to its declared tax deduction.
In two sentences, the response answers the question and explains why it is the correct answer.