Which of the following factors should be included in the cash flows used to estimate a project's NPV?
A) all overhead costs incurred
B) interest on funds borrowed to help finance the project
C) the end-of-project recovery of any working capital required to operate the project
D) cannibalization effects, but only if those effects increase the project's projected cash flows

Question

Quizplus · Accepted Answer

The end-of-project recovery of working capital is a relevant cash flow for NPV calculations as it represents cash inflow at the project's end. Overhead costs and interest are typically not included in project cash flows, and cannibalization effects should be considered regardless of whether they increase or decrease cash flows.

Which of the Following Factors Should Be Included in the Cash