Which principles refers to the assumption that a project will be evaluated based on its incremental cash flows?

Answer: Stand alone principle

Explanation:

Stand alone principle is the principle that is used by a company to decide whether or not to engage in a project based on the profitability of identical projects that has the same risk. Stand alone principle allows firms to evaluate a project based solely on the incremental cash flows of a firm that is related to the project.

Without stand-alone principle, the project evaluation for a firm would require the forecast of all of the firm's cash flows.