Which of the following is not a relevant cash flow when estimating the increment

ID: 2777865 • Letter: W

Question

Which of the following is not a relevant cash flow when estimating the incremental cash flows for a new hospital service?

Select one:

a. The value of floor space needed for the project.

b. Revenues from an existing service that would be lost as a result of the new service.

c. Shipping and installation costs associated with the new service.

d. The cost of a consultant's report (concerning the feasibility of the service) completed (and paid for) in the previous year.

e. An increase in inventory costs that would result if the project is undertaken.

Correct option is "D" -The cost of a consultant report completed and paid for in the previous year as it is a sunk cost.

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