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Incremental Cash Flows |
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Incremental cash flows Difference between the firm's cash flows with and without a project. Incremental Cash Flows The difference between a company's cash flow and its potential cash flow, should it undertake a certain project. That is, a company nets the potential cash flow from a project it is considering and subtracts its current cash flow in order to calculate the incremental cash flow. This is important in the risk analysis of a potential project; a negative incremental cash flow indicates that the project is likely not worth the risk. A positive incremental cash flow shows that, all other things being equal, the project may be beneficial for the company. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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