Final answer:
Allocated expenses, which are indirect costs assigned to the project, should not be included in a project’s cash flows as they do not represent actual cash transactions attributable to the project. Option c
Step-by-step explanation:
In the evaluation of a project's financial viability, it is essential to accurately calculate the project's cash flows. Cash flow calculations should include all actual cash transactions that will occur as a result of undertaking the project.
This typically involves cash expenses which are the direct outflows of cash, and cash revenue, which are the direct inflows of cash to the business from the project. However, allocated expenses, which are indirect costs assigned to the project on some arbitrary basis, should not be included in a project's cash flows. This is because these costs do not represent actual cash transactions attributable directly to the project.
Therefore, the correct answer to the question is that allocated expenses should not be included in a project's cash flows calculations. Option C