Please answer True or False to the following:

1. The key focus in capital budgeting analysis is pre-tax cash flows, as tax rates vary by country

2. Cash which a firm holds for the precautionary motive, is held to meet unforeseen, unpredicted contingencies or unexpected disbursements.

3. Cash flow refers to funds which a firm receives or pays out.

4. When estimating the cash flows for a particular project, it is important to include a portion of the sunk corporate overhead costs in the annual project cash flow calculations.

5. Many new products may have sales and cash flows that extend beyond the capital budgeting time-frame. Limiting the capital budgeting analysis to a set time-frame may under-estimate the projects Net Present Value (NPV).