Whether the project is based on the relevant cash flow or increamental cash flow. Introduction: The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Question

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Answer 1

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

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Answer 2

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

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Answer 3

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

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Answer 4

Question

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

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Answer 5

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 6

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 7

Chapter 10, Problem 10.1CTF

Summary Introduction

To determine: Whether the project is based on the relevant cash flow or increamental cash flow.

Introduction:

The relevant cash flow comes under the incremental cash flow that is helpful in a projects decision making. Thus, a variation in the total future cash flow of a firm that is from the direct outcome of the decision to obtain a project is the relevant cash flow.

Answer 8

Expert Solution & Answer

Answer to Problem 10.1CTF

The project analysis that is based on the relevant cash flow of the project is referred to as the stand-alone principle.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Incremental cash flows:

The incremental cash flow is the differentiation among the future cash flow with a project and a future cash flow without a project. As the relevant cash flows are stated as the increments to, the changes in, the present cash flow of the firm, they are referred to as the incremental cash flow that are connected with the projects.

The stand-alone principle is a guess, that the analysis of the project may be based on the relevant cash flow or the incremental cash flow of the project. The stand-alone principle mainly states that once the firm finds the incremental cash flow from the project, then the firm can view the project as a type of “minifirm”.

Hence, the stand-alone principle analysis the project based on the relevant cash flow of the project.

Answer 12

Ch. 10.1 - What are the relevant incremental cash flows for...Ch. 10.1 - What is the stand-alone principle?Ch. 10.2 - Prob. 10.2ACQ Ch. 10.2 - Prob. 10.2BCQ Ch. 10.2 - Explain why interest paid is not a relevant cash...Ch. 10.3 - What is the definition of project operating cash...Ch. 10.3 - For the shark attractant project, why did we add...Ch. 10.4 - Prob. 10.4ACQ Ch. 10.4 - How is depreciation calculated for fixed assets...Ch. 10.5 - Prob. 10.5ACQ

Concept explainers

Answer to Problem 10.1CTF

Explanation of Solution

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Chapter 10 Solutions