An answer of 2-3 sentences per question should suffice.

• A: When forecasting depreciation using the percentage-of-sale approach, we typically project depreciation as a function of sales. True or false?
• B: When performing an analysis that requires several assumptions (such as valuing a stock), is it recommended that one performs sensitivity analysis? Why or why not?
• C: When computing free cash flows, should one add, subtract, or ignore an investment (or increase) in property, plant, and equipment? Why?
• D: Would you rather have $90 today or $95 one year from now, assuming an interest rate of 4% and annual compounding? Why?