Back to Assignment Attempts Keep the Highest/5 1. Concepts used in cash flow estimation Capital budgeting analysis not only requires the evaluation of cash flows but also requires the understanding of the origin of those cash flows. Based on your understanding of cash flows in a firm, complete and answer the following questions: The present value of can be used to determine the basis of a firm's value. Ideally, capital budgeting analysis should take cash flows into account Understanding the nature of projects Capital budgeting analysis often involves decisions related to expansion projects and/or replacement projects. Based on your understanding of expansion and replacement projects, complete the following: A rental car company bought a new fleet of midsize cars and sold off its old midsize cars because they had too many miles on them. Which type of project would this be considered? O An expansion project A replacement project Ch 13: Assignment - Capital Budgeting. Estimating Cash Understanding the nature of projects Capital budgeting analysis often involves decisions related to expansion projects and/or replacement projects. Based on your understanding of expansion and replacement projects, complete the following: A rental car company bought a new fleet of midsize cars and sold off its old midsize cars because they had too many miles on them. Which type = project would this be considered? An expansion project O A replacement project What are sunk costs? Sunk costs are in the capital budgeting analysis. ry The role of externalities A large soft-drink company currently produces regular cola and diet cola. It is considering introducing a new soft drink that tastes like regular col has zero calories like the diet cola. The new zero-calorie drink that tastes like regular cola is most likely to produce externality