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. Working Capital

    This ratio indicates whether a company has enough short term ...
  6. Promotional CD rate (Bonus CD rate)

    A limited-time offer of a higher rate of return on a certificate ...
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. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center