The fact that a proposed project is analyzed based on the project's incremental cash flows is the assumption behind which one of the following principles?
A) Underlying value principle
B) Stand-alone principle
C) Equivalent cost principle
D) Salvage principle
E) Fundamental principle

Question

Quizplus · Accepted Answer

The stand-alone principle assumes that a project's incremental cash flows should be analyzed independent of the cash flows of other projects or the overall company. This is why each project should be evaluated based on its own incremental cash flows, rather than looking at company-wide or industry-wide cash flows.

The Fact That a Proposed Project Is Analyzed Based on the Project's