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Business
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Financial Management
Quiz 11: Cash Flow Estimation and Risk Analysis
Path 4
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Question 21
True/False
Suppose Walker Publishing Company is considering bringing out a new finance text whose projected revenues include some revenues that will be taken away from another of Walker's books. The lost sales on the older book are a sunk cost and as such should not be considered in the analysis for the new book.
Question 22
True/False
Opportunity costs include those cash inflows that could be generated from assets the firm already owns if those assets are not used for the project being evaluated.
Question 23
Multiple Choice
Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?
Question 24
Multiple Choice
When evaluating a new project, firms should include in the projected cash flows all of the following EXCEPT:
Question 25
Multiple Choice
Which of the following statements is CORRECT?
Question 26
True/False
The change in net working capital associated with new projects is always positive, because new projects mean that more working capital will be required. This situation is especially true for replacement projects.