Relevant cash flows ate the specific set of cash flows that a firm can expect if it implements the project. If the firm doesnt implement the project, the cash flows wont exist. So it is the additional cash flows that the company can expect from the project.

True or False

If a firm adopts a residual distribution policy, distributions are determined as a residual item. Therefore, the better the firm's investment opportunities, the higher its distributions should be.

True

False

For a leveraged firm, the standard deviation of its Return on Invested Capital (_ROIC) is 1.8%, the standard deviation of its Return on Equity (_ROE) is 5.8%. So its calculated financial risk is: _____

		1.8%
		4.0%
		5.8%
		7.6%