Ask Question
BusinessBusiness
31 July, 01:03

Depreciation associated with a project will: Answer A. cause incremental cash flows to increase B. only affect the fixed asset account as depreciation is a sunk cost C. have no effect on incremental cash flows D. cause incremental operating cash flows to decrease

+5
Answers (1)
  1. 31 July, 01:19
    0
    Answer: A. cause incremental cash flows to increase

    Explanation:

    Incremental Cashflow (ICF) is the added cash that a company gets from embarking on a project which means that this Cashflow must be independent of expenses. If ICF is positive then the company will see it's Cashflow increase if they accept the project because it will contribute to their cash flow.

    ICF is calculated from the Net Income of the project but seeing as Depreciation is a non-cash expense that is removed from the Income Statement. In calculating ICF it is added back as ICF deals with actual cash and Depreciation did not cost any actual cash.

    More Depreciation therefore means an increase in Incremental Cash flow when it is being calculated from Net Income.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Depreciation associated with a project will: Answer A. cause incremental cash flows to increase B. only affect the fixed asset account as ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Which of the following are characteristics of laissez-faire leadership? Select all that apply. The group members are self-directed. The leader resolves conflicts and determines policies. Decisions are made quickly.
No Answers
An architect's compensation package includes the total cost of a $250-per-month health insurance plan, the total cost of a $35-per-month life insurance plan, and a salary of $55,000 per year. What is the yearly value of the compensation package? A.
Answers (1)
The first factor to consider in pricing is who your demographic is. grazzi, the competing handbag, is marketing to upper-middle-class, professional working women. how do you want to position the bien tote in relation to grazzi?
Answers (1)
What is the sba intended to do? a. decrease competition b. support small businesses c. reduce prices for consumers d. increase school programs for business education
Answers (1)
Glebe Company accepted a credit card account receivable in exchange for $1,100 of services provided to a customer. The credit card company charges a 5% fee for handling the transaction.
Answers (1)
New Questions in Business
Silver Trading Corp. recorded a net income of $200,000 for the year 2021. For the same period, the company purchased land for $150,000. It sold some of its long term investments for $50,000 during the period.
Answers (1)
What is the term that refers to a form of wealth that can be stored for the future?
Answers (1)
NewLinePhone Corp. is very risky, with a beta equal to 2.8 and a standard deviation of returns of 32%. The risk-free rate of return is 3% and the return on the market is 11%. NewLinePhone's marginal tax rate is 35%.
Answers (1)
Which of the following is a drawback of setting pay rates based strictly on a pay policy line? A. It increases the administrative burden of managing the compensation system. B. Employees have difficulty interpreting regression analysis. C.
Answers (1)
Long-lived assets are: a) non-operating assets expected to yield their economic benefits (or service potential) over a period longer than one year.
Answers (1)
Home » Business » Depreciation associated with a project will: Answer A. cause incremental cash flows to increase B. only affect the fixed asset account as depreciation is a sunk cost C. have no effect on incremental cash flows D.
Sign Up Forgot Password?