You have spent $45,000 researching a project. Your research suggests that the project will occupy half of your current office space, which is currently unused, but could be rented out for $6,000 per month. The project will also require you to add a member to your IT team, whose salary is expected to be $5,000 per month. Excluding the costs mentioned above you expect the project to generate $9,000 a month in profits. Identify whether (and in what direction) each of these costs should be counted as incremental cash flows of the project.

Answer rating: 100% (QA)

To identify whether each cost should be counted as an incremental cash flow of the project we need to determine if the cost is directly attributable t... View the full answer