Please explain to me how to answer these questions:

1 The cash flow from projects for a company is computed as the:

A net operating cash flow generated by the project, less any sunk costs and erosion costs.

B net income generated by the project, plus the annual depreciation expense.

C sum of the incremental operating cash flow and after-tax salvage value of the project.

D sum of the sunk costs, opportunity costs, and erosion costs of the project.

E sum of the incremental operating cash flow, capital spending, and net working capital expenses incurred by the project.

2 Which one of the following will decrease net working capital of a firm?

A an increase in inventory

B a decrease in accounts receivable

C a decrease in fixed assets

D an increase in the firm's checking account balance

E a decrease in accounts payable

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

A erosion cost.

B opportunity cost.

C sunk cost.

D net working capital expense.

E salvage value expense.

4 Walks Softly, Inc. sells customized shoes. Currently, it sells 10,000 pairs of shoes annually at an average price of $68 a pair. It is considering adding a lower-priced line of shoes which sell for $49 a pair. Walks Softly estimates it can sell 5,000 pairs of the lower-priced shoes but will sell 1,000 less pairs of the higher-priced shoes by doing so. What is the amount of the sales that should be used when evaluating the addition of the lower-priced shoes?

A $313,000

B $789,000

C $177,000

D $857,000

E $245,000

5 Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $640,000. The lot was recently appraised at $810,000. At the time of the purchase, the company spent $50,000 to grade the lot and another $4,000 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1.2 million. What amount should be used as the initial cash flow for this building project?

A $1,840,000

B $2,060,000

C $1,200,000

D $2,010,000

E $1,890,000

6 Erosion can be explained as the:

A loss of revenue due to employee theft.

B additional income generated from the sales of a newly added product.

C loss of cash due to the expenses required to fix a parking lot after a heavy rain storm.

D loss of current sales due to a new project being implemented.

E loss of revenue due to customer theft.