Question

Elley's Baskets makes handmade baskets for distribution to upscale retail outlets. The firm is currently considering making handmade wreaths as well. Which one of the following is the best example of an incremental operating cash flow related to the wreath project?
a. Storing supplies in the same space currently used for materials storage.
b. Researching the market to determine if wreath sales might be profitable before deciding to proceed.
c. Planning on lower interest expense by assuming the proceeds of the wreath sales will be used to reduce the firm's currently outstanding debt.
d. Hiring additional employees to handle the increased workload should the firm accept the wreath project.
e. Utilizing the basket manager to oversee wreath production.

Answer 1

Answer:

c. Planning on lower interest expense by assuming the proceeds of the wreath sales will be used to reduce the firm's currently outstanding debt.

Explanation: