Finance



Pitfalls of Incremental Cash Flow

.

Incremental Cash Flow

The cash flow or incremental cash flow is one in which only recorded revenues and costs attributable to the project, and which had not been incurred if the project has not executed. Thus, the picture is relevant to the analysis of the goodness of the project. The revenue recorded in the incremental cash flow must be clearly attributable to the project being evaluated. Incremental revenues are those that result from a comparison of incomes in the project scenario and without the project. The only difference is attributable to the project. For example, suppose a ...