Without proposed Project A, a firm's estimated cash flows over the next 3 years is $275M. With proposed Project A, the firm's estimated cash flows over the next 3 years is $300M. What is the amount of incremental cash flows associated with Project A? A. $300M B. $25M C. $275M D. $575M

option B) $ 25M

Explanation:

Data provided in the problem:

Without proposed project A,

The estimated cash flows over the next 3 years = $ 275M

With the proposed project A,

The estimated cash flows over the next 3 years = $ 300M

Now, the amount of incremental cash flows associated with Project A will be calculated as;

Incremental cash flow = Cash flows (With Project A) - Cash flows (Without Project A)

on substituting the values, we get

Incremental cash flow = $ 300M - $ 275M = $ 25M

Hence, the correct answer is option B.