Use the following to answer questions 44-47. 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 $20,000. The machines, refrigerators and other needed equipment is estimated to cost $40,000. Delivery and installation will be an additional $5,000. Based on the survey results, you expect new sales from the coffee shop to be $20,000 per year, with new operating expenses totaling $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%. You expect to use the equipment for 10 years. After year 10, the salvage value of your equipment is $10,000. The $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? $40,000 $45,000 $60,000 $65,000 How much are operating cash flows for the coffee shop? $7,000 $10,000 $12,000 $25,000 What is the shut-down cash flow for Sand In Your Shorts? $3,000 $3, 500 $7,000 $10,000