How do sunk costs affect the determination of cash flows

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Reference no: EM131176595

1) Should you focus on cash flows or accounting profits in making the capital-budgeting decision? Should you be interested in incremental cash flows, incremental profits, total free cash flow, or total profits?

2) How does depreciation affect free cash flow?

3) How do sunk costs affect the determination of cash flows?

4) What is the project’s initial outlay? 5.) What are the differential cash flows over the project’s life?

6) What is the terminal cash flow?

7) Draw a cash-flow diagram for this project.

8) What is its net present value?

9) What is its internal rate of return?

10) Should the project be accepted? Why or why not?

11) How does Genesis 47:18-19 relate to this project and cash flow management?

Reference no: EM131176595

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