Final answer:
Incremental cash flows are the cash flows that occur as a direct consequence of undertaking a project. They represent the additional revenues, cost savings, and working capital changes directly related to the project's implementation.
Step-by-step explanation:
The incremental cash flows come about as a direct consequence of taking a project under consideration. Incremental cash flows are the additional cash flows a business can expect to receive from a specific project compared to if the project was not undertaken. They can include additional revenues, cost savings, and the release of working capital, among others, that occur directly because of the project's execution.