5. The determination of net cash flows should never include:

A. changes in operating costs.

B. interest charges.

C. changes in depreciation.

D. "changes in depreciation" and "changes in operating costs" only

6. Which of the following is true of opportunity costs?

A. Similar to sunk costs

B. Must be estimated and included in the cash flows of the project

C. Not included in initial cash flow

D. Similar to fixed costs

E. Should be ignored by the firm\

7. Which of the following is true of sunk costs?

A. Deciding factor in most project decisions

B. Often combined with terminal cash flow

C. Not included in initial cash flow

D. Similar to opportunity costs

E. Similar to variable costs

8. According to the incremental cash flow principle, a firm should:

A. include variable costs and exclude fixed costs in the project's cash flows.

B. include sunk costs in the project's cash flows.

C. exclude variable costs and fixed costs in the project's cash flows.

D. include variable costs and fixed costs.

E. exclude opportunity costs in the project's cash flows.