Use the following to answer questions 3-6. Recall our beach resort example. You have been asked to analyze data for the new coffee shop Sand in Your Shorts. A recently completed guest survey demonstrates high demand for project. The cost of the survey was dollar 20,000 The machines, refrigerators and other needed equipment is estimated to cost dollar 40,000. Delivery and installation will be an additional dollar 5,000. Based on the survey results, you expect new sales from the coffee shop to be dollar 20,000 per year, with new operating expenses totaling dollar 5,000 per year. The equipment will be depreciated over 8 years (your resort uses straight-line depreciation). Your firm's marginal tax rate is 30 percent. You expect to use the equipment for 10 years. After year 10, the salvage value of your equipment is dollar 10,000 The dollar 20,000 cost of the guest survey is an example of A sunk cost An opportunity cost An externality An incremental cash flow How much are the initial cash flows for Sand In Your Shorts dollar 40,000 dollar 45,000 dollar 60,000 dollar 65,000 How much are operating cash flows for the coffee shop? dollar 7,000 dollar 10,000 dollar 12,000 dollar 25,000 What is the shut-down cash flow for Sand In Your Shorts? Dollar 3,000 dollar 3, 500 dollar 7,000 dollar 10,000