32.

Which of the following statements is/are correct? I. Project analysis should include all the incremental cash flows II. A project must create a positive operating cash flow without affecting sales. III. The depreciation tax shield creates a cash outflow for a project. IV. Interest expense will not be included as a cash outflow whenanalyzing a project. V. The opportunity cost of a company-owned building that is going to be used in a new project should not be included as a cash flow to the project.

III, IV and V only

III and V only

I, II, III and V only

I, III and V only

I and IV only

33. Last week, JC Penny's made a $0.40 quarterly cash payment per share out of its net income to its shareholders. This kind of cash payments is referred to as ______________.

regular cash dividend

special dividend

liquidating dividend

repurchase

extra cash dividend

34. Which of the following statements related to the internal rate of return (IRR) is/are not correct?

I. The IRR method of analysis does not work well for projects with non-conventional cash flows. II. The IRR that causes the net present value of the differences between two project's cash flows to equal zero is called the discount rate. III. The IRR tends to be used more than net present value simply because it does not consider the time value of money. IV. Both the timing and the amount of a project's cash flows do not affect the value of the project's IRR.

II, III and IV only

I, II, III and IV

III and IV only

I, II, and III only

I, III and IV only