The operating cash flow of a firm is equal to net income plus depreciation provided that:

a.Taxes are ignored.

b. The financing costs are ignored.

c. The project is a cost cutting project.

d. The costs are expressed as equivalent annual costs.

e. Net income is positive.

2. Dani's company recently developed a personal therapy product that has been proven to reduce stress, promote overall health, and develop muscle definition, flexibility, and core strength. The product is used while the customer is sitting watching TV and while sleeping. Amazingly, the product actually works, and there is nothing like it on the market today. Dani is convinced that bringing the product to market will result in a positive NPV, but the sales projections are uncertain - there's nothing similar on the market to which to compare. The best way for Dani to test the validity of the sales projections is to use:

a. IRR analysis.

b. Sensitivity analysis.

c. Operating leverage analysis.

d. Payback analysis.

e. Payback and break-even analysis.