Incremental Cash Flow

AAA

DEFINITION of 'Incremental Cash Flow'

The additional operating cash flow that an organization receives from taking on a new project. A positive incremental cash flow means that the company's cash flow will increase with the acceptance of the project.

INVESTOPEDIA EXPLAINS 'Incremental Cash Flow'

There are several components that must be identified when looking at incremental cash flows: the initial outlay, cash flows from taking on the project, terminal cost or value and the scale and timing of the project. A positive incremental cash flow is a good indication that an organization should spend some time and money investing in the project.

RELATED TERMS
  1. Capital Budgeting

    The process in which a business determines whether projects such ...
  2. Cash Flow

    1. A revenue or expense stream that changes a cash account over ...
  3. Operating Cash Flow - OCF

    In accounting, a measure of the amount of cash generated by a ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, ...
  5. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
  6. Deferred Tax Asset

    A deferred tax asset is an asset on a company's balance sheet ...
Related Articles
  1. Operating Cash Flow: Better Than Net ...
    Markets

    Operating Cash Flow: Better Than Net ...

  2. What Is A Cash Flow Statement?
    Markets

    What Is A Cash Flow Statement?

  3. Which is a better measure for capital ...
    Budgeting

    Which is a better measure for capital ...

  4. What are the differences between dilutive ...
    Investing

    What are the differences between dilutive ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center