You are setting up cash flows to do capital budgeting for a new project to manufacture smart dog leashes. You have been toying with this idea for a couple of years. Which of the following cash flow should be included in your analysis?

1) The original buying price of the genuine leather used as decorative piece on these synthetic leashes. The leather used for this piece will come from the scrap leftover pieces of leather from your shoe factory that are currently thrown in trash.

2) The cost to run trials on actual dogs two years ago to see if they liked wearing smart leashes.

3) The cost of housing and feeding your dog who is the main inspiration for this product.

4) The cost of microchip embedded in the leash.

2 . Which of the following is correct about dividend policy:

a) According to the Signaling hypothesis, both high or low payout policies can be good as long as the firm avoids frequent switches between the two.

b) According to the Signaling hypothesis, a non-dividend paying firm should start giving dividends because of its positive signal as long as it can maintain it.

c) According to the Signaling hypothesis, firm should always decide about its dividend policy according to the capital needed for firm growth.