Flashcards in Topic 5 Deck (8)
Sunk costs is a cost that has already been _____ and cannot be _______# incremental cash flow.
The incremental cash flows for project evaluation consist of any and all _______in the firm’s _____cash flows that are a direct consequence of undertaking the project.
The stand-alone principle is the _______of a project based on the project’s ________cash flows.
Opportunity costs are the most valuable alternative that is given up if a particular investment is undertaken = ______ _______ _______.
incremental cash flow
Side effects -> erosion -> the cash flows of a ____ project that come at the expense of a firm’s existing projects = incremental cash flow.
Financing costs -> _____ ______ ______ used to discount the cash flows reflects, in part, the financing costs of the project = incremental cash flow.
the interest rate
An investment of the firm in the project’s ____ ______ ______ represents an additional cost of undertaking the investment.
net working capital