Relevant cash flow which company expects when its will implement project is classified as_____________?
Correct answer: C. Incremental cash flow
- A. Irrelevant cash flow
- B. Relevant cash flow
- C. Incremental cash flow
- D. Decrease cash flow
Explanation
The cash-flow change caused specifically by accepting and implementing a project is its incremental cash flow. It measures the project's addition to the firm's existing cash flows.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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