The calculation of differential cash flows over a project's life should include which of the following?
A)Labor and material savings
B)Additional revenues attributable to the project
C)Investment in net working capital
D)All of the above
E)None of the above

Question

Quizplus · Accepted Answer

Differential cash flows should take into account all changes in cash flows directly attributable to the project, including labor and material savings, additional revenues, and any investment in net working capital. Therefore, all of the options listed (A, B, and C) should be considered when calculating differential cash flows.

The Calculation of Differential Cash Flows Over a Project's Life