Question

A project's incremental cash flow is the difference between the firm's cash flow if it accepts the project versus if it rejects the project. Thus, if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be -$1 million. True or false?

Answer 1

Answer:

false

Explanation:

Incremental cash flow is the additional cash flow from a project after the initial investment.

if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be 0