When evaluating long-term investment proposals, firms that pay income taxes can ignore the impact these taxes have on cash flows. A. True B. False The required rate of return is typically based on the company's cost of capital. A. True B. False Sanders Company would like to purchase a specialized production machine for $1,000,000. The machine is expected to have a life of five years, and a salvage value of $300,000. Annual maintenance costs will total $50,000. Annual labor savings are predicted to be $280,000. The company's required rate of return is 5 percent. Ignoring the time value of money, what is the net cash inflow or (outflow) resulting from this investment opportunity? A. ($100,000) B. $950,000 C. $1, 450,0000 D. $450,000 E. None of the answer choices is correct. A depreciation tax shield is the tax savings resulting from depreciation expense. A. True B. False If a project has an internal rate of return of 25% and a negative net present value, which of the following statements is true regarding the discount rate used for the net present value computation? A. The required rate of return must have been 0%. B. The required rate of return must have been equal to 25%. C. The required rate of return must have been less than 25%. D. The required rate of return must have been greater than 25%. E. None of the answer choices is correct. Reinhart Company would like to purchase a new machine for $5,000,000. The machine is expected to have a life of five years, and a salvage value of $1,000,000. Annual maintenance costs will total $300,000. Annual labor and material savings are predicted to be $2,000,000. The company's required rate of return is 26 percent. What is the payback period for this investment (round to the nearest month)? A. 1 year, 11 months. B. 1 year, 9 months. C. 2 years, 9 months. D. 2 years, 11 months