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An app startup currently has one million per year in cash flows from its garden-themed SIMS game. The firm is looking at developing a new pet-theme...

An app startup currently has one million per year in cash flows from its garden-themed SIMS game. The firm is looking at developing a new pet-theme SIMS game. In preliminary projections, the CFO believes that the new project can generate an additional one million in new cash flows per year. He argues that the two products could bring in a total of two million in cash flows per year. After evaluating his prediction, you conclude that cash flows are likely to be

     A. more than two million because of sunk costs.

B. less than two million because of opportunity costs.

C. less than two million because of erosion.

D. more than two million because of capital spending.

 

I choose c?

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