1. The value of currently unused warehouse space that will be used as part of a new capital budgeting project is

		an opportunity cost.
		a sunk cost.
		irrelevant to the investment decision.
		an overhead expense.

2. Consider a project with the following cash flows:

Year	Cash Flow
0	-10,000
1	4,000
2	4,000
3	4,000
4	4,000

If the appropriate discount rate for this project is 15% p.a. compounded annually, then the NPV is closest to:

		-$867
		$6,000
		$1,420
		$867