Nirvana Chip Designs has finished designing its next generation of$$ chips, the XJ$5000$ series and is getting ready to start production. As the analyst on the$$ project, you are required to prepare pro forma free cash flows. Which of the following are relevant to your$$ analysis?

a$.$ Design cost for the chips

b$.$ Potential lost sales of the XJ$4000$ chips

c$.$ Proportional cost of the corporate jet lease a$.$ Design cost for the chips. $($Select the best choice below.$)$

A$.$ This is relevant because it is an investment in working capital.

B$.$ This is irrelevant because it is a sunk cost.

C$.$ This is irrelevant as it represents existing overhead.

D$.$ This is relevant as it represents cannibalization of existing sales.

b$.$ Potential lost sales of the XJ$4000$ chips. $($Select the best choice below.$)$

A$.$ This is irrelevant as it represents existing overhead.

B$.$ This is relevant as it represents cannibalization of existing sales.

C$.$ This is relevant because it is an investment in working capital.

D$.$ This is irrelevant because it is a sunk cost.

c$.$ Proportional cost of the corporate jet lease. $($Select the best choice below.$)$

A$.$ This is irrelevant as it represents existing overhead.

B$.$ This is irrelevant because it is a sunk cost.

C$.$ This is relevant because it is an investment in working capital.

D$.$ This is relevant as it is a capital investment. d$.$ Start$-$up investment in raw materials. $($Select the best choice below.$)$

A$.$ This is relevant because it is an investment in working capital.

B$.$ This is irrelevant because it is a sunk cost.

C$.$ This is relevant as it represents cannibalization of existing sales.

D$.$ This is irrelevant as it represents existing overhead.

e$.$ Upgrades to the chip fabrication facility required if the chip is produced.

$($Select the best choice below.$)$

A$.$ This is relevant as it represents cannibalization of existing sales.

B$.$ This is irrelevant as it represents existing overhead.

C$.$ This is irrelevant because it is a sunk cost.

D$.$ This is relevant as it is a capital investment.

f$.$ Market research done to guide the development of the new chip. $($Select the

best choice below.$)$

A$.$ This is relevant as an opportunity cost of using the land and buildings

on the new chip.

B$.$ This is relevant as it is a capital investment.

C$.$ This is relevant because it is an investment in working capital.

D$.$ This is irrelevant because it is a sunk cost. g$.$ Market value of land and buildings where new chip will be produced.

the best choice below.$)$

A$.$ This is relevant as an opportunity cost of using the land and buildings

on the new chip.

B$.$ This is relevant because it is an investment in working capital.

C$.$ This is irrelevant because it is a sunk cost.

D$.$ This is irrelevant as it represents existing overhead.

d$.$ Start$-$up investment in raw materials

e$.$ Upgrades to the chip fabrication facility required if the chip is produced

f$.$ Market research done to guide the development of the new chip

g$.$ Market value of land and buildings where new chip will be produced