27.

Which of the following are considered relevant cash flows in the analysis of a project?

I: sunk costs II: opportunity costs III: positive side effects IV: changes in net working capital V: financing costs

Group of answer choices

II, III and IV

III and IV

II, III and V

I, II, IV and V

II and IV

28.

Salish Sea Corp. is gearing up for a new project, which requires it to acquire $305,000 worth of new fixed assets, to spend $85,000 on net working capital and as a result, long-term debt is expected to increase by $350,000. The project has a 5-year life. What is the initial investment outlay of this project?

Group of answer choices

$420,000

740,000

$305,000

$390,000

$85,000

29.

Chuckanut Corp. acquired some equipment three years ago for $26,000. The equipment is classified as 5-year property for MACRS. The firm is considering selling these assets now for a market price of $18,000. What is the net cash flow from the salvage value if the tax rate is 21 percent?

MACRS 5-year property

Year Rate

1 20.00%

2 32.00%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

Group of answer choices

$16,358.88

$14,655.46

$14,220.00

$18,904.80

$15,308.64