When forecasting cash flows for Capital Projects, we must also include and evalu

ID: 2780531 • Letter: W

Question

When forecasting cash flows for Capital Projects, we must also include and evaluate ...

A. any incremental investment in Net Working Capital required by the proposed project.

B. any marketing costs spent in evaluating the potential of the target market (Sunk Costs).

C.the cost of equipment including installation and set up costs.

D. estimates of residual or scrap value of the project at the end of its useful life.

A. any incremental investment in Net Working Capital required by the proposed project.

Dear student...thank you for using chegg...correct answer is F. All of the above except B.

Sunk costs are those costs which have already been incurred and are irrelevant in forecasting cash flows for Capital Projects.

All other options are relevant in forecasting cash flows.

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