Choose One:

The cash flows for a project include the:

1- net operating cash flow generated by the project, less both sunk and erosion costs.

2- incremental operating cash flow and aftertax salvage value of the project.

3- net income generated by the project plus the annual depreciation expense.

4- sunk costs, opportunity costs, and erosion costs of the project.

5- incremental operating cash flow, as well as the capital spending and net working capital requirements.