Incremental cash flows in capital investment decisions

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Reference no: EM131457780

It is important to identify and use only incremental cash flows in capital investment decisions

1) because they are the simplest to identify

2) only when the stand alone principle fails to hold

3) because ultimately it is the change in a firm's overall future cash flows that matter

4) in order to accommodate unforeseen changes that might occur

5) whenever sunk costs are involved

Reference no: EM131457780

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