CHAPTER 8 Making Capital Investment Decisions I. DEFINITIONS INCREMENTAL CASH FLOWS a 1. The changes in a firms future cash flows that are a direct consequence of accepting a project are called _ cash flows. a. incremental b. stand-alone c. after-tax d. net present value e. erosion Difficulty level: Easy EQUIVALENT ANNUAL COST e 2. The annual annuity stream of payments with the same present value as a projects costs is called the projects _ cost. a. incremental b. sunk c. opportunity d. erosion
