True or False?

1) A company that sells common stock and uses the money to pay off a loan is increasing its use of financial leverage.

2) the initial outlay for a new project is an example of an opportunity cost.

3) the guiding rule in deciding if a free cash flow is incremental is to look at the company with, versus without, the new project.

4) if a firm imposes a capital constraint on investment projects, the appropriate decision criterion is to select the set of projects that jas the highest positive net present value subject to capital constraint.