Relate lost sales to the definition of incremental cash flow, Financial Management

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Relate the concept of lost sales to the definition of incremental cash flow.

While a new capital project is take on it may compete with an existing project or projects, causing the old project or projects to experience a loss in sales revenue. From an incremental cash flow standpoint, the incremental revenue of new project is the total sales revenue related with the new project minus the lost sales revenue from the old project or projects.

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