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20 September, 06:03

Project A has an initial investment of - 255,852 and project B has an initial investment of - 63,595. What is the incremental cash flow for time zero when evaluating this project?

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  1. 20 September, 09:42
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    If project A is chosen, incremental cash flow is - $192,257

    If project B is chosen, incremental cash flow is $192,257

    Explanation:

    If the company chooses project A over project B, the incremental cash flow would the amount of money expended more or less because of the choice made, hence incremental cash flow would be $-192257 (-$255,852 (-$63,595)).

    However, if project is chosen instead incremental cash flow is $192,257, in other words the company is saving $192,257 by opting for project B instead of A
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