Which of the following should be included as relevant cash flows in the analysis

Question

Which of the following should be included as relevant cash flows in the analysis of a new product?

I. reduction in sales for a current product once the new produce is introduced

II. money already spent for research and development of the new product

III. increase in accounts receivable needed to finance sales of the new product

IV. market value of a machine owned by the firm which will be used to produce the new product

II and III only

I and IV only

I, II, and III only

I, III, and IV only

I, II, III, and IV

II and III only

I and IV only

I, II, and III only

I, III, and IV only

I, II, III, and IV

Explanation / Answer

1 ,4 is the not relevant to the new product

2, 3 are the included as relevant cash flows in the analysis of a new product

so answer is 1 and 4 only

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