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12 Margarite's Enterprises is considering a new 5-year project that will require $612,000 for new fixed assets, $160,000 for Inventory, and $35,000 for accounts receivable. Short-term debt is expected to increase by $110,000. The fixed assets will be depreciated straight-line to zero over the life of the project. The project is expected to generate annual sales of $694,000 with costs of $428,000. The tax rate is 35 percent, and the required rate of return is 15 percent. 0.5 What is the amount of the earnings before interest and taxes (EBIT) for the first year of this project? points Multiple Choice eBook Print O $138.500 References O $143,600 O $167,000 O $93,340 O $90,025The most valuable investment given up if an alternative investment is chosen is referred to as a[n) O. 5 points Multiple Choice sun k cost opportunity cost. References salvage value expense. equivalent annual cost. e ['05 l0 ['1 COST. OOOOO Refe rences Which one of the following is an example of an incremental cash ow for Project Epsilon? Multiple Choice 00000 Insurance on a building the company currently owns that will house the operations for Project Epsilon Property taxes on a currently owned warehouse that has been sitting idle but is going to be utilized by Project Epsilon Cost of the test marketing to ascertain whether Project Epsilon is feasible Rental cost of some new machinery that will be acquired for Project Epsilon Contractual annual salary ofthe company president 9 The incremental cash flows of a project are best defined as 0.5 points Multiple Choice eBook O the cash received from the additional sales generated by the project. Print References O any change in a firm's cash flows resulting from the addition of the project including opportunity costs. O the cash received or lost from changes in the sales of a firm's current products as a result of adding the project. O the increase or decrease in a firm's cash flows resulting from adding the project, excluding all sunk and opportunity costs. O the total cash flows of a firm once the new project is completely integrated into the firm's operations.11 Project analysis is focused on costs. 0.5 points Multiple Choice eBook O total Print References O sunk O variable O incremental O fixed10 Sunk costs include any cost that 0.5 points Multiple Choice eBook O will change if a project is undertaken. Print References O will be incurred if a project is accepted. O has previously been incurred and cannot be changed. O will occur if a project is accepted and once incurred, cannot be recouped. O is paid to a third party and cannot be refunded for any reason whatsoever