Diamond Chemical

Essay specific features

 

Issue:

History

 

Written by:

Margaret D

 

Date added:

March 13, 2016

 

Level:

 

Grade:

A

 

No of pages / words:

5 / 1271

 

Was viewed:

8332 times

 

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Essay content:

Only the cash flows that are incremental to the project are considered. Hence it is important to determine the cash flows that occur as a direct consequence of accepting the project. Sunk Costs: Sunk cost is a cost that has already occurred and such costs should be ignored while considering the incremental cash flows...
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This is because the firm forgoes other opportunities by using these assets. Side effects: These are the cash flows that come as a side effect of the new project. These are classified as erosion or synergy. Erosion occurs when the new project reduces the cash flows for the existing projects. Synergy occurs when the cash flows of the existing projects increase due to the new project...
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