6. Which of the following is NOT a relevant cash flow and thus should NOT be reflected in the analysis of a capital budgeting project? a. Changes in net operating working capital. b. Shipping and installation costs for machinery acquired. c. Cannibalization effects. d. Opportunity costs. e. Sunk costs that have been expensed for tax purposes.

Which of the following statements is FALSE? A. When evaluating a capital budgeting decision, we generally include interest expense. B. Only include as incremental expenses in your capital budgeting analysis the additional overhead expenses that arise because of the decision to take on the project. C. Many projects use a resource that the company already owns. O D. As a practical matter, to derive the forecasted cash flows of a project, financial managers often begin by forecasting earnings.

The weighted average cost of capital is used to determine whether or not a project should be done.   true false

In capital budgeting decisions, are there reasons a company might choose to take a project that was NPV negative? Explain.

None

Hi, number 3 still appears to be unanswered for this problem. How do you determine relevant cash flow (after-tax) at project disposal (termination)?

13.Concerning incremental project cash flow, this is a cost one would never count as a cash flow of the project. A. taxes paid B. financing costs C. initial investment D. operating expenses of the project

Why is it important to consider the cost of long-term capital expenditures when they reside on the balance sheet?

Use an example to explain to show why capital budgeting relies on cash flows rather than net income?

What are three variables that the firm does not control when it seeks to raise funds; indicate the impact of the costs.