The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Term Concept or Definition The cash flows that the asset or project is expected to generate over its life The effects on other parts of the firm The specific cash flows that should be considered in a capital budgeting decision The cost of not choosing another mutually exclusive project by accepting a particular project A cost that has been incurred and may be related to a project but should not be part of the decision to accept or reject a project Alexander Industries owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Alexander Industries include the value of the warehouse as part of the initial investment in the new project? Yes, because the firm could sell the warehouse if it didn't use it for the new project. No, because the company will still be able to sell the warehouse once the project is complete. No, because the cost of the warehouse is a sunk costu A cell phone company recently gave customers the ability to buy applications that they can download to their cell phones. Allowing customers to use these applications increased cell phone sales. This is an example of externality an environmental a negative within-firm a positive within-firm 2. Incremental costs - Initial and terminal cash flow Aa Aa consider the case of Alexander Industries: Wlexander Industries is considering a project that requires an investment in new equipment of $4,000,000, with an ladditional $200,000 in shipping and installation costs: Alexander estimates that its accounts receivable and inventories need to increase by $800,000 to support the new project, some of which is financed by a $320,000 Increase in spontaneous liabibties (accounts payable and accruals). The total cost of Alexander's new equipment is and consists of the price of the new equipment plus thel asset's installation, shipping, and delivery costs asset's salvage value project's additional accounts receivable investment In d suppose Alexander's new equipment is expected to sell for $1,000,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net working capital investment. The company chose to use straight-line depreciation, and the new equipment was fully depreciated by the end of its useful life. If the firm's tax rate is 40%, what is the project's total termination cash flow? $880,000 O $1,000,000 0 $ 600,000 $1,080,000