It is important to identify and use only incremental cash flows in capital investment decisions:
a. Because ultimately it is the change in a firm's overall future cash flows that matter.
b. Because they are the simplest to calculate.
c. To accommodate unforeseen changes that might occur.
d. Only when the stand-alone principal fails to hold.
e. Whenever sunk costs are involved.© BrainMass Inc. brainmass.com June 3, 2020, 10:52 pm ad1c9bdddf
The importance of incremental cash flows in capital investment decisions are given.