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HW9 (C12) a Search Us cours boek Tornen Industries is considering an expansion. The necessary count would be purchased for mand wil betydeprecated at the time of purchase, and the expansion would require an additional 1 milion investment in operating working capital. The tax rates what the intement autoryter bonus depreciations concerne out your newer complete for comm, 12 million should be enteret e 11,000,000 your answer to nearest your AZ The company set and expense $10.000 on researched to the rest year would the change your 1. No, last year's expenditure is considered a work out and does not representan we comence, should not be included in the way 11. Yes, the cost of research is an incremental show and should be the way. 11. Yes, but only the tax effect of the research expenses should be included in the analys IV., last years expenditure should be treated as a team from date with at the end of the project's the one hodnot lectured in the initia! investment V. No, last year's expendture is considered as oportunity cost and does not represent an incremental cachon om, hodnotenie te wees Suppose the company plans to wes buling that it was te house the project. The building could be sold for 54 millones and restate con would that act affect your newer 1. The potential cate of the building represents an opportunity cost of conducting the project an en buiteng. Therefore, we poste alter-tax saie price must be charged against the project as a cost The potential of the building represents an opportunity cost of conducting the project in the building. Therefore, the positie before sale price de charged against the projects m. The potential of the building represents an extensity and therefore should not be charged against the project TV The potential of the building represents a relation and therefore should be charged at the project V. The potential cate or the building represents a real man and therefore should not be charged against the project -Select- AZ Thonen Industries is considering an expansion. The necessary equipment would be purchased for $5 million and will be fully deprecated at the time of purchase, and the expansion would require an additional $1 milion investint in net operating working capital. The tax rate is 25% 3. What is the instalinvestment outlay er honus depreciation is considered? Write out your answer completely. For example, 13 million should be entered as 13,000,000 Round your answer to the nearest dollar. Enter your answer as a positive value b. The company spent and expensed $10,000 on research related to the project last year. Would this change your answer? Explain. L. No, last year's expenditure is considered a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis 11. Yes, the cost of research is an incremental cash flow and should be included in the analysis Yes, but only the tax effect of the research expenses should be included in the analysis 1. No, last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay V. No, last year's expenditure is considered an opportunity cost and does not represent an Incremental cash flow. Hence, it should not be included in the analysis. Suppose the company plans to use a building that it owns to house the project. The building could be sold for $4 million after taxes and real estate commissions. How would that fact affect your answer? 1. The potential sale of the building represents an opportunity cost of conducting the project in that building. Therefore, the possible after-tax sale price must be charged against the project as a cost. IL. The potential sale of the building represents an opportunity cost of conducting the project in that building. Therefore, the possible before tax sale price must be charged against the project as a cost. III. The potential sale of the building represents an externality and therefore should not be charged against the project IV. The potential sale of the building represents a real option and therefore should be charged against the project v. The potential sale of the building represents a real option and therefore should not be charged against the