The folowing 25 muliple choice questions are worth 70 points. Write your answers on the answer l. At a given level of greshaction a finm has a DOL. of 1.90. What is the expected impact if revenues are f to decrease by 30%7 57% increase in 57% 578 iscrease in operating cash fhow 57% decrease in cyerating cash now increase in gross profi d 2. Based on the information given in the answer choices below, which of the following firms will have the Firm A. DOL 1.2 hFirm B,DOL 1. e. Fim C DOL 2.3 d. Firm D, DOL of 100 3. Which of the following is tue regarding the comparison of the straight-line depreciation method to MACRS method? a. the straight-line method leads to lower cumulative taxes over years 1-2 b the MACRS method leads to lower cumulative taxes over years 1-2 e. the MACRS method leads to a higher total value of depreciation expense over the life of th capital investment 4. Next year, your firm expects to have annual depreciation expense of $500,000. If the tax rate is and the discount rate is 10%, what is the present value of next year's deprecation tax shield? a. $159,090.91 b. $325,000.00 $175,000.00 5. Which of the following factors is a firm least likely to consider when correctly evaluating a project? a. The incremental sales earned by the project b. The current market value of any equipment to be replaced c. Previous expenditures associated with a market test to determine the feasibility of the pro 6. Which of the following statements is least accurate? a. Financing cash flows are considered in the analysis of incremental cash flows b. If two projects are independent, the fact that they have unequal lives does not affect th . An incremental cash flow represents the change in the firm's total cash flow that occ sult of taking a project Capital Management, Version B