Incremental Cash Flow Examples: Understanding Key Concepts

The correct answer is option C: I and III only. \n\nAn incremental cash flow refers to a cash flow that occurs as a result of a specific decision or action taken by a company. \n\nI. An increase in accounts receivable is not an example of an incremental cash flow. It represents a change in the asset side of the balance sheet but does not directly result from a specific decision or action. \n\nII. A decrease in net working capital is an example of an incremental cash flow. It represents a change in the current assets and liabilities and is a result of specific decisions or actions taken by a company. \n\nIII. An increase in taxes is an example of an incremental cash flow. It represents a cash outflow that occurs as a result of tax obligations. \n\nIV. A decrease in the cost of goods sold is not an example of an incremental cash flow. It represents a change in expenses but does not directly result from a specific decision or action. \n\nTherefore, the correct answer is option C: I and III only.