12. A pro forma financial statement is a financial statement that: a. expresses all values as a percentage of either total assets or total sales. b. compares actual results to the budgeted amounts. c. projects future years' operating results. d. values all assets based on their current market values. 13. The amount by which a firm's tax bill is reduced as a result of the depreciation expense is referred to as the depreciation: a. tax shield. b. tax credit c. tax return. d. IRS cost. 14. Which one of the following terms is most commonly used to describe the cash flows of a new project that are simply an offset of reduced cash flows for a current project? a. Opportunity cost b. Erosion C. Offset flows d. Pirated flows 15. The analysis of a new project should exclude: a. tax effects. b. erosion effects. C. sunk costs. d. opportunity costs