Why is "Not adding back depreciation" a common mistake in Net cash inflows and outflows?

Why it happens: Treating profit as cash. How to avoid it: Add back depreciation (non-cash) to profit to get the net cash inflow. Source: 9706 Examiner Reports

Why is "Adding depreciation to an already-cash figure" a common mistake in Net cash inflows and outflows?

Why it happens: Not checking the starting point. How to avoid it: Add back depreciation ONCE, only when starting from profit; not if the figure is already cash. Source: 9706 Examiner Reports

Why is "Forgetting working capital" a common mistake in Net cash inflows and outflows?

Why it happens: Only listing the asset cost. How to avoid it: Include working capital as an outflow at the start AND an inflow at the end. Source: 9706 Examiner Reports

Why is "Forgetting the scrap value" a common mistake in Net cash inflows and outflows?

Why it happens: Stopping at the annual inflows. How to avoid it: Add the scrap (residual) value as an inflow in the final year. Source: 9706 Examiner Reports

Why is "Including sunk costs" a common mistake in Net cash inflows and outflows?

Why it happens: Counting money already spent. How to avoid it: Exclude sunk costs (already spent, unrecoverable) — they are irrelevant to the decision. Source: 9706 Examiner Reports

Why is "Including apportioned existing fixed costs" a common mistake in Net cash inflows and outflows?

Why it happens: Treating a share of overheads as a project cost. How to avoid it: Include only INCREMENTAL fixed costs caused by the project, not a share of existing ones. Source: 9706 Examiner Reports

Cambridge International A Levels Accounting (9706)

Net cash inflows and outflows

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Detailed Study Notes

Detailed notes on Investment appraisal for Cambridge International A Levels Accounting, covering key concepts, explanations, examples, and exam-focused revision points.

Net Cash Inflows & Outflows — Cambridge AS & A Level Accounting 9706 Study Notes (2026-2028)

Identifying the cash flows for a project. Learn how to work out the relevant net cash flows of an investment — the initial outflow, the annual net cash inflows (including adding back depreciation), the scrap value and working capital — ready for investment appraisal.

At a glance

Investment appraisal uses net cash flows, not accounting profit.
Net cash flow = cash inflows − cash outflows for each year of the project.
Year 0: the initial investment (a cash outflow), plus any working capital invested.
Annual net cash inflow = profit before depreciation (add back depreciation, a non-cash item).
Final year: add the scrap/residual value and the release of working capital.
Only relevant cash flows count — ignore sunk costs and non-cash items.
These net cash flows are the input to payback, ARR, NPV and IRR.

What you’ll learn

Mapped to the Cambridge International A Level 9706 syllabus (2026-2028).

2.2.7 — Identify the relevant net cash flows of an investment project.
2.2.7 — Adjust accounting profit to a cash basis (add back depreciation).
2.2.7 — Include initial investment, working capital and scrap value correctly.

Cash flows, not profit

Investment appraisal uses cash, so add back non-cash items.

Investment appraisal is based on cash flows, not accounting profit, because what matters for an investment is the actual cash it generates and when. So the first task is to identify the project's net cash flows:

$\text{Net cash flow} = \text{Cash inflows} - \text{Cash outflows}$

A common adjustment is depreciation: it is a non-cash expense, so if you are given the profit, you must add back depreciation to get the net cash inflow:

$\text{Annual net cash inflow} = \text{Profit (after depreciation)} + \text{Depreciation}$

(Equivalently, the cash inflow is the profit before depreciation.) So if a project's profit is $20,000 after $8,000 depreciation, its net cash inflow is $28,000. Getting the cash flows right is the foundation — every appraisal technique uses them.

Appraisal uses cash flows, not accounting profit.
Net cash flow = inflows − outflows.
Add back depreciation (non-cash) to profit for the cash inflow.
Cash inflow = profit before depreciation.

See the full worked example for net cash inflows and outflows →

The initial investment and working capital

Year 0 outflow = the asset cost plus any working capital.

The project usually begins with a large outflow at the start — Year 0:

the cost of the asset(s) purchased (e.g. machinery) — a cash outflow;
any working capital needed to run the project (extra inventory and receivables) — also an outflow at the start.

So:

$\text{Year 0 outflow} = \text{Initial investment} + \text{Working capital invested}$

Example. Machine $200,000 + working capital $30,000 → Year 0 outflow = $230,000.

Working capital is treated as invested at the start and released at the end of the project (it is recovered when the project finishes and inventory/receivables are run down). So it is an outflow at the start and an inflow at the end — it does not disappear, it is tied up during the project.

Year 0 outflow = initial investment + working capital invested.
The asset cost is an outflow at the start.
Working capital is invested at the start (outflow).
Working capital is released at the end (inflow).

See the full worked example for net cash inflows and outflows →

Scrap value and the final year

Add the scrap value and the released working capital at the end.

In the final year of the project, two extra inflows usually arise:

the scrap (residual) value of the asset — the cash received when it is sold/disposed of at the end;
the release of the working capital invested at the start.

So:

$\text{Final-year net cash flow} = \text{Annual net cash inflow} + \text{Scrap value} + \text{Working capital released}$

Example. Final year: net cash inflow $28,000 + scrap value $20,000 + working capital released $30,000 = $78,000.

These items are easy to forget but matter, especially for NPV (the scrap and released working capital are discounted in the final year). So the full cash-flow profile is: Year 0 outflow → annual inflows → final-year inflow with scrap and working capital.

Final-year inflows: scrap value + released working capital.
Add these to the final year's annual net cash inflow.
They are commonly forgotten — include them.
They are discounted in the final year for NPV.

See the full worked example for net cash inflows and outflows →

Relevant cash flows only

Include only future, incremental cash flows; ignore sunk costs.

Only relevant cash flows should be included — those that are future and change as a result of the decision (incremental):

include the asset cost, the incremental revenues and costs, working capital, scrap value;
exclude sunk costs (already spent, e.g. past market research) — they do not change with the decision;
exclude non-cash items (depreciation — though it is added back to profit) and apportioned fixed costs that would be incurred anyway;
be careful with financing cash flows (interest), which are usually reflected in the discount rate rather than the cash flows.

So building the cash-flow profile is a matter of identifying what actually changes if the project goes ahead. A clear table — Year 0, Years 1–n, final year — listing each inflow and outflow makes the appraisal that follows (payback, ARR, NPV, IRR) straightforward. The quality of the appraisal depends entirely on getting these cash flows right.

Include only future, incremental cash flows.
Exclude sunk costs (already spent) and apportioned fixed costs.
Exclude non-cash items (but add back depreciation to profit).
A clear cash-flow table feeds the appraisal techniques.

Quick recap

Investment appraisal uses net cash flows, not accounting profit.
Add back depreciation (non-cash) to profit to get the net cash inflow.
Year 0 outflow = initial investment + working capital invested.
Final year: add scrap value and the released working capital.
Include only future, incremental cash flows; exclude sunk costs and apportioned fixed costs.
The cash-flow table is the input to payback, ARR, NPV and IRR.

Memorise this

Verbatim phrases and definitions Cambridge mark schemes credit.

Net cash inflow = profit + depreciation (add back the non-cash item).
Year 0 outflow = initial investment + working capital invested.
Final year += scrap value + working capital released.
Relevant cash flows only: future + incremental; ignore sunk costs.

How it’s examined

Tested on Paper 4 (A Level): identify the net cash flows of a project (initial outflow, annual inflows adding back depreciation, scrap and working capital) as the basis for appraisal (commonly [4-8] marks within a larger question). Examiner reports note candidates failing to add back depreciation and forgetting working capital/scrap.

Sources: Cambridge International AS & A Level Accounting 9706 syllabus (2026-2028); 9706 Paper 4 past papers & mark schemes, 2022-2024; 9706 Examiner Reports, 2022-2024. Last reviewed 2026-06-19.

Take this whole topic with you

Step-by-step worked examples — Net cash inflows and outflows

Step-by-step solutions to past-paper-style questions on net cash inflows and outflows, written exactly the way a tutor would explain them at the board.

Question type:

1Add back depreciation (4 marks)
Getting startedMulti-step problem• 9706 Paper 4 style• cash inflow, AO2
Question
A project's annual profit is $35,000 after charging depreciation of$ 12,000. Calculate the annual net cash inflow. (4 marks)
Step-by-step solution
1. Step 1
  Depreciation is non-cash, so add it back to profit.
2. Step 2
  Net cash inflow = profit + depreciation = 35,000 + 12,000.
3. Step 3
  = $47,000.
Answer
$47,000.
Examiner tip
Cash inflow = profit + depreciation (the non-cash add-back).
2Year 0 outflow (3 marks)
Getting startedMulti-step problem• initial investment, AO2
Question
A project requires a machine costing $250,000 and working capital of$ 40,000 at the start. Calculate the Year 0 cash outflow. (3 marks)
Step-by-step solution
1. Step 1
  Year 0 outflow = initial investment + working capital.
2. Step 2
  = 250,000 + 40,000.
3. Step 3
  = $290,000.
Answer
$290,000.
Examiner tip
Include the working capital invested at the start.
3Final-year inflow (4 marks)
Building confidenceMulti-step problem• final year, AO2
Question
In the final year, the annual net cash inflow is $47,000, the machine's scrap value is$ 25,000, and the $40,000 working capital is released. Calculate the final-year net cash flow. (4 marks)
Step-by-step solution
1. Step 1
  Final-year flow = annual inflow + scrap value + working capital released.
2. Step 2
  = 47,000 + 25,000 + 40,000.
3. Step 3
  = $112,000.
Answer
$112,000.
Examiner tip
Add scrap value and released working capital in the final year.
4Relevant or not? (4 marks)
Building confidenceIdentify & classify• relevant cash flows, AO2
Question
State whether each is a relevant cash flow for appraisal (Y/N): (a) cost of the new machine; (b) past market research already paid; (c) extra annual revenue; (d) depreciation. (4 marks)
Step-by-step solution
1. Step 1
  (a) New machine → Y (a future incremental outflow).
2. Step 2
  (b) Past market research → N (a sunk cost).
3. Step 3
  (c) Extra annual revenue → Y (an incremental inflow).
4. Step 4
  (d) Depreciation → N (non-cash; added back to profit).
Answer
(a) Y; (b) N (sunk); (c) Y; (d) N (non-cash).
Examiner tip
Include future, incremental cash flows; exclude sunk and non-cash items.
5Build the cash-flow profile (6 marks)
StretchMulti-step problem• cash flow profile, AO2
Question
A 3-year project: machine $180,000 + working capital$ 30,000 at Year 0; annual net cash inflow $90,000; scrap value$ 20,000 and working capital released at the end. State the net cash flow for Year 0, Years 1-2, and Year 3. (6 marks)
Step-by-step solution
1. Step 1
  Year 0 = −(180,000 + 30,000) = −$210,000.
2. Step 2
  Year 1 = +$90,000; Year 2 = +$90,000.
3. Step 3
  Year 3 = 90,000 + scrap 20,000 + working capital 30,000 = +$140,000.
Answer
Year 0 − $210,000; Years 1-2 +$ 90,000 each; Year 3 +$140,000.
Examiner tip
Lay out the profile year by year, including scrap and working capital at the end.
6Ignore sunk costs (4 marks)
StretchWord problem• sunk costs, AO3
Question
A company has already spent $15,000 on a feasibility study. Explain why this should be excluded from the appraisal. (4 marks)
Step-by-step solution
1. Step 1
  The $15,000 has already been spent — it is a sunk cost.
2. Step 2
  It cannot be recovered whatever the company decides.
3. Step 3
  So it does not change as a result of the decision (not incremental).
4. Step 4
  Including it would wrongly make the project look worse; exclude it.
Answer
It's a sunk cost — already spent, unrecoverable, and unchanged by the decision; exclude it.
Examiner tip
Sunk costs are irrelevant to the decision.
7Working capital in and out (4 marks)
StretchWord problem• working capital, AO2
Question
Explain how working capital is treated in the cash flows of an investment project. (4 marks)
Step-by-step solution
1. Step 1
  Working capital (extra inventory/receivables) is invested at the start — an outflow.
2. Step 2
  It stays tied up during the project (not an expense).
3. Step 3
  It is released (recovered) at the end of the project — an inflow.
4. Step 4
  So it appears as an outflow in Year 0 and an inflow in the final year.
Answer
Invested (outflow) at the start, released (inflow) at the end; tied up in between.
Examiner tip
Working capital is recovered at the end, not lost.
8Why cash, not profit (4 marks)
StretchWord problem• cash inflow, AO3
Question
Explain why investment appraisal is based on cash flows rather than accounting profit. (4 marks)
Step-by-step solution
1. Step 1
  Investors care about the actual cash a project generates and when.
2. Step 2
  Accounting profit includes non-cash items (e.g. depreciation) and accruals.
3. Step 3
  Cash flows reflect the real timing of money in and out.
4. Step 4
  Techniques like NPV need cash flows to discount for the time value of money.
Answer
Cash flows reflect the real money and timing; profit includes non-cash items and accruals.
Examiner tip
Appraisal needs cash, especially for discounting.
9Don't double-count depreciation (3 marks)
StretchWord problem• depreciation, AO2
Question
A student adds depreciation back to a figure that is already a net cash inflow. Explain the error. (3 marks)
Step-by-step solution
1. Step 1
  Depreciation is added back only when converting profit to cash.
2. Step 2
  If the figure is already a net cash inflow, depreciation has been dealt with.
3. Step 3
  Adding it again overstates the cash flow.
Answer
Add depreciation back only to profit; if it's already a cash inflow, adding it again overstates it.
Examiner tip
Add back depreciation once, only when starting from profit.
10Only incremental fixed costs (4 marks)
StretchWord problem• relevant cash flows, AO3
Question
A project is allocated a share of the existing factory rent. Explain whether this should be included in the appraisal. (4 marks)
Step-by-step solution
1. Step 1
  The existing factory rent is paid whether or not the project goes ahead.
2. Step 2
  So the apportioned share is not incremental — it does not change with the decision.
3. Step 3
  Only extra (incremental) fixed costs caused by the project are relevant.
4. Step 4
  So the apportioned rent should be excluded.
Answer
Exclude it — apportioned existing rent isn't incremental; only extra fixed costs count.
Examiner tip
Only incremental costs are relevant.

Model Answers — Net cash inflows and outflows

High-scoring sample answers for net cash inflows and outflows on the Cambridge IGCSE paper, with examiner-style notes mapping each response to the mark scheme and assessment objectives.

Question 1
9706 Paper 4 style4 marks
Q (4 marks). A project's annual profit is $48,000 after charging depreciation of$ 15,000. Calculate the annual net cash inflow and explain your adjustment.
Model answer
Net cash inflow = profit + depreciation = 48,000 + 15,000 = $63,000. Depreciation is added back because it is a non-cash expense — it was deducted in calculating profit but no cash leaves the business, so it must be added back to find the actual cash the project generates.
Why this scores
Marking (point-based, 4). $63,000 (2); depreciation non-cash / added back (2).
Question 2
9706 Paper 4 style3 marks
Q (3 marks). A project needs equipment costing $320,000 and working capital of$ 50,000 at the start. Calculate the Year 0 cash outflow.
Model answer
Year 0 outflow = initial investment + working capital = 320,000 + 50,000 = $370,000.
Why this scores
Marking (point-based, 3). Include working capital (1); $370,000 (2).
Question 3
9706 Paper 4 style4 marks
Q (4 marks). In the final (4th) year of a project, the annual net cash inflow is $63,000, the asset's scrap value is$ 30,000, and the $50,000 working capital is released. Calculate the net cash flow for the final year.
Model answer
Final-year net cash flow = annual inflow + scrap value + working capital released = 63,000 + 30,000 + 50,000 = $143,000.
Why this scores
Marking (point-based, 4). Add scrap (1.5); add working capital released (1.5); $143,000 (1).
Question 4
9706 Paper 4 style8 marks
Q (8 marks). A 3-year project: equipment $300,000 plus working capital$ 40,000 at Year 0. Annual profit each year is $120,000 after depreciation of$ 90,000 per year (straight-line, scrap value $30,000). Working capital is released at the end. Calculate the net cash flow for Year 0, Year 1, Year 2 and Year 3.
Model answer
Annual net cash inflow = profit + depreciation = 120,000 + 90,000 = $210,000. Year 0 = −(300,000 + 40,000) = −$340,000. Year 1 = +$210,000. Year 2 = +$210,000. Year 3 = 210,000 + scrap 30,000 + working capital 40,000 = +$280,000.
Why this scores
Marking (point-based, 8). Add back depreciation → $210,000 (2); Year 0 −$ 340,000 (2); Years 1-2 (2); Year 3 incl. scrap & WC $280,000 (2).
Question 5
9706 Paper 4 style4 marks
Q (4 marks). Before deciding on a project, a company spent $25,000 on a market research study. Explain why this$ 25,000 should not be included in the investment appraisal.
Model answer
The $25,000 spent on market research is a sunk cost — it has already been incurred and cannot be recovered whatever the company now decides. Because it does not change as a result of the investment decision (it is not incremental), it is irrelevant to the appraisal. Including it would distort the analysis by making the project appear less profitable than it really is in terms of the future cash flows that actually depend on the decision. Only future, incremental cash flows should be included.
Why this scores
Marking (point-based, 4). Already incurred / unrecoverable (2); not incremental / irrelevant (1); only future incremental flows (1).
Question 6
9706 Paper 4 style5 marks
Q (5 marks). Explain how working capital is dealt with in the cash flows used for investment appraisal, and why it is not treated as a cost.
Model answer
When a project starts, the business usually has to invest in extra working capital — additional inventory and trade receivables to support the higher level of activity. This is recorded as a cash outflow at the start (Year 0). The working capital is not a cost/expense, however, because it is not used up — it is tied up in the business during the project and remains recoverable. At the end of the project, this working capital is released (inventory is run down and receivables collected), so it is recorded as a cash inflow in the final year. So working capital appears as an outflow at the start and an equal inflow at the end, reflecting that it is invested and then recovered rather than consumed.
Why this scores
Marking (point-based, 5). Invested = outflow at start (2); not a cost / tied up (1.5); released = inflow at end (1.5).
Question 7
9706 Paper 4 style4 marks
Q (4 marks). Explain why investment appraisal techniques use a project's cash flows rather than its accounting profits.
Model answer
Investment appraisal uses cash flows because what ultimately matters to a business is the actual cash an investment generates and when it is received or paid. Accounting profit is calculated on the accruals basis and includes non-cash items (such as depreciation) and timing adjustments that do not represent actual cash movements, so it does not reliably show the cash position. In addition, the more sophisticated techniques (such as NPV) discount future cash flows to allow for the time value of money, which requires cash flows, not profit. Using cash flows therefore gives a truer picture of the project's value and the timing of its returns.
Why this scores
Marking (point-based, 4). Actual cash & timing matter (2); profit includes non-cash/accruals (1); NPV needs cash to discount (1).
Question 8
9706 Paper 4 style4 marks
Q (4 marks). State whether each is a relevant cash flow for an investment appraisal: (a) the purchase price of a new machine; (b) depreciation of the machine; (c) extra revenue the machine will generate; (d) a share of the existing factory manager's salary.
Model answer
(a) Purchase price → relevant (a future incremental outflow). (b) Depreciation → not relevant (non-cash; it is added back to profit). (c) Extra revenue → relevant (an incremental inflow). (d) Share of the existing manager's salary → not relevant (it is paid anyway — not incremental).
Why this scores
Marking (point-based, 4). 1 mark each. Future incremental cash flows are relevant.
Question 9
9706 Paper 4 style4 marks
Q (4 marks). A new project is allocated $10,000 of the company's existing fixed overheads. Explain whether this should be included in the project's cash flows.
Model answer
The $10,000 is a share of the company's existing fixed overheads, which the company would incur anyway, whether or not the project goes ahead. Because it is not incremental — it does not change as a result of the decision — it is not a relevant cash flow and should be excluded from the project's appraisal. Only any additional (incremental) fixed costs that the project causes the company to incur should be included. Including the apportioned overhead would understate the project's true contribution to the business.
Why this scores
Marking (point-based, 4). Incurred anyway / not incremental (2); exclude / only incremental fixed costs (2).
Question 10
9706 Paper 4 style3 marks
Q (3 marks). A project is expected to earn an annual profit of $54,000 after deducting straight-line depreciation of$ 18,000. State the project's annual net cash inflow and explain why it differs from the profit.
Model answer
Annual net cash inflow = profit + depreciation = 54,000 + 18,000 = $72,000. It is higher than the profit because depreciation is a non-cash expense: it was deducted in arriving at the $54,000 profit, but no cash actually left the business, so it is added back to find the real cash the project generates.
Why this scores
Marking (point-based, 3). $72,000 (2); depreciation non-cash / added back (1).

Key Formulae — Net cash inflows and outflows

The formulae you need to memorise for net cash inflows and outflows on the Cambridge IGCSE paper, with every variable defined in plain English and a note on when to use it.

Annual net cash inflow
$Net\ cash\ inflow = Profit\ (after\ depreciation) + Depreciation$
$Profit$
accounting profit after depreciation
$Depreciation$
the non-cash charge added back
When to use
To convert profit to the cash inflow for appraisal.
Example
35,000 + 12,000 = $47,000.
Year 0 cash outflow
$Year\ 0\ outflow = Initial\ investment + Working\ capital\ invested$
$Initial investment$
cost of the asset(s)
$Working capital$
extra inventory/receivables invested at the start
When to use
To find the initial outflow of the project.
Example
250,000 + 40,000 = $290,000.
Final-year net cash flow
$Final\ year = Annual\ inflow + Scrap\ value + Working\ capital\ released$
$Scrap value$
residual cash from selling the asset
$Working capital released$
recovery of the working capital invested
When to use
To find the final year's net cash flow.
Example
47,000 + 25,000 + 40,000 = $112,000.

Key Definitions and Keywords — Net cash inflows and outflows

Definitions to memorise and the exact keywords mark schemes credit for net cash inflows and outflows answers — sharpened from recent examiner reports for the 2026 Cambridge IGCSE sitting.

Net cash flow
Examiner keyword
Cash inflows − cash outflows for a period of a project.
Annual net cash inflow
Examiner keyword
Profit + depreciation (profit before the non-cash depreciation charge).
Initial investment (Year 0)
Examiner keyword
The cash outflow at the start to buy the asset(s), plus any working capital invested.
Working capital (in appraisal)
Examiner keyword
Invested as an outflow at the start and released as an inflow at the end of the project.
Scrap (residual) value
Examiner keyword
The cash received from disposing of the asset at the end; an inflow in the final year.
Relevant cash flow
Examiner keyword
A future, incremental cash flow that changes as a result of the decision.
Sunk cost
Examiner keyword
A cost already incurred that cannot be recovered; irrelevant to the decision.

Common Mistakes and Misconceptions — Net cash inflows and outflows

The traps other students keep falling into on net cash inflows and outflows questions — taken from recent Cambridge IGCSE examiner reports and mark schemes — and how to avoid them.

✕Not adding back depreciation
9706 Examiner Reports
Why it happens
Treating profit as cash.
How to avoid it
Add back depreciation (non-cash) to profit to get the net cash inflow.
✕Adding depreciation to an already-cash figure
9706 Examiner Reports
Why it happens
Not checking the starting point.
How to avoid it
Add back depreciation ONCE, only when starting from profit; not if the figure is already cash.
✕Forgetting working capital
9706 Examiner Reports
Why it happens
Only listing the asset cost.
How to avoid it
Include working capital as an outflow at the start AND an inflow at the end.
✕Forgetting the scrap value
9706 Examiner Reports
Why it happens
Stopping at the annual inflows.
How to avoid it
Add the scrap (residual) value as an inflow in the final year.
✕Including sunk costs
9706 Examiner Reports
Why it happens
Counting money already spent.
How to avoid it
Exclude sunk costs (already spent, unrecoverable) — they are irrelevant to the decision.
✕Including apportioned existing fixed costs
9706 Examiner Reports
Why it happens
Treating a share of overheads as a project cost.
How to avoid it
Include only INCREMENTAL fixed costs caused by the project, not a share of existing ones.

Net cash inflows and outflows

Detailed Study Notes

At a glance

What you’ll learn

Quick recap

Memorise this

How it’s examined

Take this whole topic with you

1Add back depreciation (4 marks)

2Year 0 outflow (3 marks)

3Final-year inflow (4 marks)

4Relevant or not? (4 marks)

5Build the cash-flow profile (6 marks)

6Ignore sunk costs (4 marks)

7Working capital in and out (4 marks)

8Why cash, not profit (4 marks)

9Don't double-count depreciation (3 marks)

10Only incremental fixed costs (4 marks)

Annual net cash inflow

Year 0 cash outflow

Final-year net cash flow

Net cash flow

Annual net cash inflow

Initial investment (Year 0)

Working capital (in appraisal)

Scrap (residual) value

Relevant cash flow

Sunk cost

✕Not adding back depreciation

✕Adding depreciation to an already-cash figure

✕Forgetting working capital

✕Forgetting the scrap value

✕Including sunk costs

✕Including apportioned existing fixed costs