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the difference between a firm's future cash flow if it accepts a project and the firm's...

the difference between a firm's future cash flow if it accepts a project and the firm's future cash flows if it does not accept the project is referred to as the project's

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Answer #1

Incremental cash flows:

The meaning of incremental cash flows is that the cash flows of a project increases upon the acceptance of a particular project. If upon acceptance of a project, the cost of goods sold decreases, then this additional cash flow is an incremental cash flow. A decrease in the networking capital is an incremental cash flow.

So, the difference between the future cash flow, if it accepts and the cash flows if it does not accept a project is called the incremental cash flows.

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