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6 All else equal, a project's operating cash flow will increase when the 0.5 points Multiple Choice eBook O net working capital requirement increases. Print References O sales projections are lowered. O interest expense is lowered. O depreciation expense increases. O earnings before interest and taxes decreases.2 Chec Bonilla Boats purchased a corner lot five years ago at a cost of $730,000. The lot was recently appraised at $680,000. At the time of the purchase, the company spent $25,000 to grade the lot and another $80,000 to pave the lot for customer parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.4 million. What amount should be used as the initial cash flow for this building project? 0.5 points Multiple Choice Book O $2,080,000 Print References O $2,130,000 O $2,235,000 O $2.185,000 O $1,400,0003 Cain's Tool & Die paid $397,000 in cash for a piece of equipment three years ago. Last year, the company spent $52,000 on equipment upgrades. The equipment is being depreciated using the straight-line method over seven years. The company no longer uses this equipment in its current operations and has received an offer of $125,000 from a firm that would like to purchase it. If the company should decide to use this equipment in an upcoming project, what 0.5 cost, if any, should be assigned to the project for this equipment? points Multiple Choice eBook Print O $0 References O $125,000 O $177,000 O $278,857 O $226,857The sale of an asset creates an aftertax cash flow in an amount equal to the Multiple Choice Sale price Book value. Sale price Tax rate x [Book value Sale price}. PETE I'E'I'ICES Sale price Tax rate x [Sale price Book value). Sale price + Tax rate x {Sale price - Book value). 0 O O O 0 Sale price x (1 Tax rate]- Changes in net working capital 0.5 points Multiple Choice eBook O are included in project analysis only if they represent cash outflows. Print References O only affect the initial cash flows of a project. O can affect the cash flows of a project every year of the project's life. O are generally excluded from project analysis due to their irrelevance to the total project. O affect the initial and the final cash flows of a project but not the cash flows of the middle years.4 Farris Industrial purchased a machine five years ago at a cost of $265,000. The machine is being depreciated using the straight-line method over eight years. The tax rate is 21 percent and the discount rate is 16 percent. If the machine is sold today for $74,500, what will be the aftertax salvage value? 0.5 points Multiple Choice BOOK $99,375.00 Print O References O $165,625.00 O $24.875.00 O $79,723.75 O $40.520.50