1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em Emphus Paragraph Styles 9. The effect of taking on a project is to change the firm's overall cash flows in the future. Initially we need to determine what cash flows are going to be relevant in making our decision. Relevant cash flows are changes in the increments to the firm's existing cash flow. Which of these statements/s is true regarding incremental cash flows? a. The incremental cash flows for a project evaluation consist of all and any changes in the firm's cash flows that are a consequence of taking on a project. b. In analysing a proposed investment we should include the interest paid and dividends in our cash flow analysis and as an incremental cash flow. c. Opportunity cost describes the most valuable alternative that will be given up if a particular project is undertaken. Opportunity costs should be included as part of the incremental cash flows. d. b and care true e. a and c are true Justification