If a project's cash flows include those triggered outside the project's incremental cash flows, it is likely that the:
A)project interacts with other aspects of the firm.
B)project must have high depreciation expense.
C)opportunity cost of capital must be high.
D)project will have a negative NPV.

Question

Quizplus · Accepted Answer

When a project's cash flows include those triggered outside the project's incremental cash flows, it suggests that the project is somehow interacting with other aspects of the firm. This could mean that the project is having an impact on other projects or divisions within the company, or that it is benefiting from resources or capabilities that are shared across the organization. In either case, this can make it more difficult to isolate the true incremental cash flows of the project, which can lead to errors in project evaluation and decision-making.

If a Project's Cash Flows Include Those Triggered Outside the Project's