Which of the following statements is most correct?

Question 5 options:

• Sunk costs should be incorporated into capital budgeting decisions.

• Opportunity costs should be incorporated into capital budgeting decisions.

• Relevant externalities should be incorporated into capital budgeting decisions.

• The rate of depreciation will not affect after-tax operating cash flows, since depreciation is not a cash expense.

• Answers b and c are correct.