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. Insurance Regulatory Information ...

    A collection of databases and tools used to analyze the financial ...
  6. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
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 some examples of how cash flows ...
    Personal Finance

    What are some examples of how cash flows ...

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center