4. Inflation impacts which of the following Market Interest Rates _ Earning power 9 Purchasing power Consumer Price Index 6 5. (a) Borrowers repay historical loan amounts with dollars of decreased purchasing (b) Depreciation expenses are based on lasts replacement costs and routinely (c) Depreci (d) Which of the following are not part inflation impacts? power, reducing the debt-financing cost expressed in constant dollars values; taxable income is overstated, resulting in higher taxes ation expense is charged to taxable income in dollars of declining Inflated salvage value combined with book values based on historical costs results in higher taxable gains. Economic Service Life is based upon which of the following factors? (a) Minimum annual equivalent costs (b) Price of a new item (c) Salvage value (d) Sales projections 6. 7. Which of the following factors are considered when defining MARR? (a) Net equity flow b) Cost of equity (c) Opportunity cost (d) Lending interest rate