Chapter Net Present Value and Capital Budgeting What the stand-alone principle says is that, once we have determined the incremental cash flows from undertaking a project, we can view that project as a kind of minifirm with its own future revenues and costs. its own assets and of course. its own cash flows We will then be primarily interested in comparing the cash flows from this minifirm to the cost of acquiring it. An important consequence of this approach is that we will be evaluating the proposed project purely on its own merits, in isolation from any other activities or projectsChapter 7 Net Present Value and Capital Budgeting What the stand—alone principle says is that, once we have determined the incremental cash flows from undertaking a project, we can view that project as a kind of “minifirm”with its own future revenues and costs, its own assets, and of course, its own cash flows. We will then be primarily interested in comparing the cash flows from this minifirm to the cost of acquiring it. An important consequence of this approach is that we will be evaluating the proposed project purely on its own merits, in isolation from any other activities or projects