The incremental cash flows of a replacement project can be estimated as the difference between operating with the new and the old equipment.

Question

Quizplus · Accepted Answer

This is a correct statement. Incremental cash flows for a replacement project can be calculated as the difference between the expected cash flows with the new equipment and the expected cash flows with the old equipment. This allows for a comparison of the potential profitability of the new investment.

The Incremental Cash Flows of a Replacement Project Can Be