Select true or false and explain:

a. The reason for the depreciation tax shield not being included in the NPV (buy - lease) is that depreciation is not a cash flow item. True/false explain

b. One of the advantages of a breakeven point over sensitivity analysis is that one can change more than one variable at a time. True/False explain

c. When an oil refinery company sells future oil contracts it is hedging the risk of an increase in oil prices. True/false explain

d. In an imputation tax system, a decision to increase corporate tax should not affect an individual investor's preference between dividends and capital gains.

e. In an imputation tax system, a decision to increase corporate tax should not affect an individual investor's preference between dividends and capital gains.