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Part IV . Principles of Cash Flow Estimation ( 2 . 5 points each: 1 . 5 points for part a; 1 point for part

Part IV. Principles of Cash Flow Estimation (2.5 points each: 1.5 points for part a; 1 point for part b)
21. Suppose you learned that AAA Health could lease its building to another party and earn $20,000 per year.
a. Should the fact be reflected in the cash flow estimation of the proposed project? Why?
b. If so, how should you handle the amount in the cash flow estimation of the proposed project? Be specific.
22. Assume that the new drink project would take away profitable sales from A3H's existing apple juice/fish oil blended energy drink business.
a. Should the fact be reflected in the cash flow estimation of the proposed project? Why?
b. If so, how should you handle the effect on the existing business in the cash flow estimation of the proposed project? Be specific.
23. Suppose you learned that A 3 H had spent $50,000 to renovate the building last year.
a. Should this cost be reflected in the cash flow estimation of the proposed project?
b. Explain why or why not.
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