You run a landscaping company and are considering the replacement of a machine that you purchased last year with one that is more fuel efficient and meets more safety standards.

1.)Are the following cash flow relevant when making your machine acquisition decision:

a.) The amount you paid last year to purchase your existing machine. (yes or no)

b.) The reduction in the company's insurance fees because of the increased safety. (yes or no)

c.) The fuel savings from the new machine.(yes or no)

2.) What type of cash flow is the following: (Sunk Cost, Financing Cost, Project-Specific/Incremental Cash flow, or Opportunity Cost)

a.) The amount you paid last year to purchase your existing machine

b.) The fuel savings from the new machine.

c.)The new machine's dealer financing of 2.9% APR (The firm's opportunity cost of capital is 6% APR).

3.)Does the following contribute to a cash flow that is relevant when making your machine acquisition decision:

a.) The new machine's dealer financing of 2.9% APR (The firm's opportunity cost of capital is 6% APR).