What is the incremental cash flow for a company that forgoes $7000 per annum rental for...
What is the incremental cash flow for a company that forgoes $7000 per annum rental for factory space for manufacturing a product that will return net cash inflows of $20 000 per annum?
Homework Answers
Incremental Cash Flows is the net of annual cash flows from the project and cash flows foregone due to undertaking of the project
Annual rental for factory space forgone = $7,000 per annum
Net Cash flows of the project = $20,000 per annum
Incremental Cash Flows for a company = Net Cash flows of the project - Annual rental for factory space forgone
= $20,000 per annum - $7,000 per annum
= $13,000 per annum
Incremental Cash Flow for a company is $13,000 per annum
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