20. All of the following are related to a proposed project. Which of these should be included in the cash flow at time zero?

I. depreciation tax shield of $1,500 II. loan of $325,000 used to finance the project III. $4,000 of equipment needed to commence the project IV. cost of inventory replenish of $500 in the third year V. wage of $60,000 paid to two newly hired workers for the project

III only

IV and V only

I, II, and IV only

IV only

I and II only

21. If a firm's weighted average cost of capital (WACC) is _________, then the firm's value will be ____________.

maximized; minimized

the same; minimized

minimized; maximized

minimized; minimized

maximized; maximized

22. The operating cash flow for a project should include all of the following except

I. taxes II. variable costs III. fixed costs IV. interest expenses V. depreciation tax shield

I and V only

I, II, III and V only

II, IV and V only

I, II, III, IV and V

IV only