Your company manufactures sports equipment. You are considering replacing a bran

Question

Your company manufactures sports equipment. You are considering replacing a brand of golf clubs with a new line of golf clubs. which of the following is not considered to be an incremental cash flow in your capitol budgeting analysis?

a) A reduction in revenue of $300,000 from terminating the old product line.

b) Land that you own with a market value of $125,000 that might be used for the new product.

c) $200,000 spent last year on research and development.

d) $350,000 you will pay to Tiger Woods for promoting the new golf clubs.

Explanation / Answer

c) $200,000 spent last year on research and development.

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