1a. If a business uses employs its capital to earn a return on Project A it cannot use the same capital to earn a return on Project B. The return not earned on Project B is an example of a(n) __________

1b. When the management of Vicknair Hospital considered a proposal to add an outpatient clinic, it did not include the negative effects the proposal would have on its existing lines of business. The negative effects described here are often referred to as __________

1c.

Which of the following items should be included in the initial cost of a capital project to be constructed on land already owned by the entity? Enter the number corresponding to the best answer, i.e, 1, 2, 3, 4, 5, or 6.

1. Cost of the project
2. Opportunity cost of selling the land to a 3rd party
3. Investment in working capital
4. Expected incremental net operating cash inflows from the project
5. Answers 1-3
6. Answers 1-4

1d.

A proposed project has an estimated salvage value of $400,000 and a tax basis (undepreciated cost) of $50,000. The expected tax rate at the end of the project is 22%. The net cash inflow relating to the salvage value that should be included in the capital budgeting analysis is $ __________