Question 9 Select the statement that is most correct. 2 Real options affect the size, but not the risk, of a project's expected cash flows. Externalities present in projects being considered in capital budgeting are very difficult to quantify and, as a result of this, they should be excluded from the financial analyses. With the current techniques available, estimating cash flows has become the easiest step in the analysis of a capital budgeting project. OA firm which bases its capital budgeting decisions on either NPV or IRR will be more likely to acce a given project if it uses MACRS accelerated depreciation than if it uses the optional straight-line alternative, other things being equal. O Since the focus of capital budgeting is on cash flows rather than on net income, changes in non- balance sheet accounts, such as inventory, are not relevant in the analysis.