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Which of the following is NOT a relevant cash flow and thus should bot be reflected in the analysis of a capital budgeting project? a. Changes in net working capital. b. Shipping and installation costs. c. Cannbalization effects. d. Opportunity costs. e. Sunk costs that have been expensed for tax purposes. Which of the following statements is CORRECT? a. An example of a sunk cost is the cost associated with restoring the site of a strip mine once the ore has been depleted. b. Sunk costs must be considered if the IRR methods is used but not if the firm relies on the NPV method. c. A good example of a sunk cost is a situation where a bank opens a new office, and that new office leads to a decline in deposits of the bank's other offices. d. A good example of a sunk cost is money that a banking corporation spent last year to investigate the site for a new office, then expensed that cost for tax purposes, and now is deciding whether to go forward with the project. e. If sunk costs are considered and reflected in a project's cash flows. then the project's calculated NPV will be higher than it otherwise would be. Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1.25; P0 = $27.50. g = 5.00% (constant), and F = 6.00%. What is the cost of equity raised by selling new common stock? a. 9.06% b. 9.44% C. 9.84% d. 10.23% e. 10.64% You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any stock. What is Quigley's WACC? a. 8.15% b. 8.48% c. 8.82% d. 9.17% e. 9.54%