1. Marginal, or incremental, cost is defined as the change in costs that occurs when there are large changes in output. True or False?

2. The accounting break-even is the sales level that results in zero project net income. True or False?

3. Capital rationing is the situation that exists if a firm has positive NPV projects but cannot find the necessary financing. True or False?

4. It is important when analyzing an investment opportunity that we consider aftertax cash flows. True or False?

5.Erosion refers to the cash flows of a new project that come at the expense of a firms existing project. True or False?

6. the formula for calculating cash break-even is as follows Q=(FC+0)/(P-v). True or False?