Depreciation must be considered when evaluating the incremental operating cash flows associated with a capital budgeting project because a. depreciation is a sunk cost. b. although it is a non-cash expense, depreciation has an impact on the taxes paid by the firm, which is a cash flow. c. the firm has a cash outflow equal to the depreciation expense each year. d. it represents a tax-deductible cash expense. e. None of the above is correct.