1. When a firm finances a new investment, it often borrows part of the money, so the interest and principal payments this creates are incremental to the project's acceptance. Should these expenditures be included or not in the project's cash flow computation? Explain. [2 Marks] 2. Briefly explain your justification why is it not appropriate / appropriate to use the formula of a perpetuity to estimate the present value of preferred stock? [2 Marks]