The proper cash flow amount that has to be utilized as an initial investment at the time of evaluating a project. Introduction: The relevant cash flow comes under the incremental cash flow that are supportive for decision-making in a project. Thus, a change in the total future cash flows of a firm that is from the direct outcome of the decision to take a project is the relevant cash flow.

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Chapter 9, Problem 1QP

Summary Introduction

To find: The proper cash flow amount that has to be utilized as an initial investment at the time of evaluating a project.

Introduction:

The relevant cash flow comes under the incremental cash flow that are supportive for decision-making in a project. Thus, a change in the total future cash flows of a firm that is from the direct outcome of the decision to take a project is the relevant cash flow.

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