Version A 33. Adams Audio is considering whether to make an investment in a new type of technology Which of the following factors should the company consider when it decides undertake the investment? I. The company has already spent $3 million researching the technology II. The new technology will affect the cash flows produced by its other operations. III. If the investment is not made, then the company will be able to sell one of its laboratories for $2 million. A. II only B. I and II C. I and III D. II and III E. I, II and III 34. Which of the following is (are) incremental cash flows in a capital budgeting analysis? I. opportunity cost II. erosion III. additions to net working capital IV. salvage values of fixed assets at the end of the project A. I and II only B. I and III only C. I, II, and IV only D. II, III, and IV only E. I, II, III, and IV 35. Upon the sale of equipment at the end of its useful life, tax liability will be incurred whenever the book value of the equipment exceeds the sales price. A. True. B. False. 36. A decrease in the corporate tax rate decreases the value of the depreciation tax shield, all else A. True B. False 10