Incremental cash flows when deciding whether to invest in a new manufacturing plant
1. Statement - Money already spent on engineering design of the new plant.
Question - Past expenses are considered sunk cost and should not be a consideration for incremental cash flow, but what if we had to alter the design, would you count that part even though it was originally done in the past? Why or why not?
2. Statement - The market value of the site and existing buildings would be cash flows.
Question - How would that fall under cash flows specifically?