Replacement projects generally have fewer elements to consider than new ventures, but identifying the incremental changes in cash flow is difficult.

Question

Quizplus · Accepted Answer

Replacement projects involve replacing an existing asset with a new one, so there are fewer unknown variables compared to new ventures. However, identifying the incremental changes in cash flow can still be challenging as it requires accurate estimation of the cash inflows and outflows associated with the replacement project.

Replacement Projects Generally Have Fewer Elements to Consider Than New