Identifying and estimating pertinent project cash flows is conceivably the most challenging phase of economic analysis. Cash flows may be ordered into one of three groups: operating activities, investing activities, and financing activities.
Respond to the following in a minimum of 175 words:
1. Explain four problematic situations that will make determining incremental cash flows difficult.
2. Explain two incremental cash flows that will occur at the investment outlay.
3. In what ways can cash flow be problematic due to added operating cash flow?
4. Why does Sunk cost makes it difficult to determine the actual amount of a project? Give an example of this and explain how the sunk cost makes it difficult to determine the amount