1. The cash flow tax savings generated as a result of a firm's tax-deductible depreciation expense is called the:

A. depreciable basis.

B. depreciation tax shield.

C. after-tax salvage value.

D. after-tax depreciation savings.

E. operating cash flow.

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

A. opportunity cost.

B. sunk cost.

C. salvage value expense.

D. erosion cost.

E. net working capital expense.