projects? A, Interest expense related to financing a project B) Sunk costs Q Required principal D) Opportunity costs Answer payments related to financing a project evaluating Capital Budgeting decisions, which of the following items should NOT be included purposes of analysis? 18. When in the construction of cash flow projections for A) Net salvage value S) Changes in net working capital requirements C) Shipping and installation costs D) All of the above should be included. Answer 19. Diamond Inc. has estimated that a new building will cost $2,500,000 to construct. Land was purchased a year ago for $500,000 and could be sold today for $550,000. An env environmental impact study required by cost of the state was performed at a cost of $48,000. For capital budgeti ng purposes, what is the relevant the new building? A) $2,500,000 B) $3,048,000 C) $3,050,000 D) $3,098,000 Answer: 20. XYz, Inc. is considering adding a product line that would utilize floor space in their manufacturing plant which is currently used for storage. XYZ will need to rent new storage space elsewhere. The floor space would be considered a(n) A) variable cost. B) opportunity cost. C) sunk cost. D) irrelevant cash flow. Answer 21. Because financial planning usually takes place in a highly uncertain environment A) it is rarely worth the time and expense. B) time horizons should be limited to a few months. C) it is important to develop contingency plans to respond to unexpected events. D) it should avoid such specific issues as what sources of financing to use. Answer 22. Strategic planning encompasses all of the following EXCEPT A) a cash budget B) a description of the firm's core competencies and activities. C) a definition of the firm's customers. D) a description of the firm's competitors and its own competitive strengths and weaknesses