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Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?

  • The new project is expected to reduce sales of one of the company's existing products by 5%.
  • Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project, a portion of her salary for that year should be charged to the project's initial cost.
  • The company has spent and expensed $1 million on R&D associated with the new project.
  • The company spent and expensed $10 million on a marketing study before its current analysis regarding whether to accept or reject the project.
  • The firm would borrow all the money used to finance the new project, and the interest on this debt would be $1.5 million per year.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M940535

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