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A firm is considering a new project. If the project goes ahead, it will require the use of an existing warehouse owned by the company.

A firm is considering a new project. If the project goes ahead, it will require the use of an existing warehouse owned by the company. If the project does not go ahead, the warehouse could be immediately rented out for $5000 per month. In relation to the use of the warehouse, what is the incremental free cash flow (i.e. how many dollars is the firm better or worse off) from proceeding with the project?

Select one:

a. $0 per month

b. $5000 per month

c. $60000 per year

d. -$5000 per month

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