1. Changes in the net working capital requirements:

A. can affect the cash flows of a project every year of the project's life

B. only affect the initial cash flows of a project

C. only affect the cash flow at time zero and the final year of a project

D. are generally excluded from project analysis due to their irrelevance to the total project

2. A cost that has already been paid, or the liability to pay has already been incurred, is a(n):

A. Salvage value expense

B. Net working capital expense

C. Sunk cost

D. Opportunity cost

3. The changes in the firm's future cash flows that are a direct consequence of accepting a project are called:

A. Incremental cash flows

B. Stand-alone cash flows

C. After-tax cash flows

D. Net present value cash flows

4. The cash flows of a new project that come at the expense of a firm's existing projects are:

A. Salvage value expenses.

B. Net working capital expenses.

C. Sunk costs.

D. Side effects or Externalities costs.

5. The result of capital cost allowance multiplied by marginal corporate tax rate is called:

A. total tax cost

B. the capital cost allowance tax shield

C. corporate income tax

D. none of the above