Question: How do you calculate the amount of depreciation under straight line and MACRS? What are the basic principles for estimating cash flows? Which costs matter and which don't? How is cannibalization handled? What are incremental earnings? How do you calculate each operating cash flow? How do you compute the taxes for each operating cash flow? How do you calculate the net investment in a project? The depreciable basis? How do you calculate the accumulated depreciation, book value, salvage value, and after tax net salvage value? How do you calculate the terminal year cash flows including both operating and non-operating cash flows? How do you determine to accept a project or not? What is a project's discounted cash flow return? How do you use discounted cash flow analysis to set a price? To choose between two projects with limited lives?