7. Which of the following cash flows are relevant incremental cash flows for a project that...
7. Which of the following cash flows are relevant incremental cash flows for a project that you are currently considering investing in? A. Research and Development expenditures you have made B. The cost of a marketing survey you conducted to determine demand for the proposed project C. Interest payments on debt used to finance the project D. The tax savings brought about by the project's depreciation expense
Homework Answers
D.the tax saving brought about by the project's depreciation expense.
research and developmnet expenses are sunk costs and not relevant.
cost of a marketing survey to determine demand is also a sunk cost and not relevant.
Depreciation on projects assets will be eligible for deduction for tax purposes and thereby create incremental cash inflows.
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