Incremental operating cash flows after taxes are relevant.
Incremental operating cash flows = Incremental EBITDA x ( 1 - t ) +
Incremental Annual Depreciation x t , where t is the marginal tax
rate.
Cash outflows associated with initial investment in a project
are relevant. Cash outflows related to initial investment would
typically include the installed cost of new assets, increase in net
working capital, and cash inflows from after tax salvage procceds
of existing assets.
Terminal cash flows are also relevant. Terminal cash flows
might include recovery of net working capital at the end of the
project, and after tax salvage proceeds of fixed assets acquired
and used for the project.