When Evaluating a New Project, Firms Should Include in the Projected

question 30

Multiple Choice

When evaluating a new project, firms should include in the projected cash flows all of the following EXCEPT which statement?

• A) previous expenditures associated with a market test to determine the feasibility of the project provided those costs have been expensed for tax purposes
• B) the value of a building owned by the firm that will be used for this project
• C) a decline in the sales of an existing product provided that decline is directly attributable to this project
• D) the salvage value of assets used for the project at the end of the project's life

---

Definitions:

Domestically Produced Products

Goods manufactured within a country's borders, emphasizing local production and sourcing.

Foreign Markets

Markets outside a company’s home country where it can engage in trade, including exporting, importing, and producing goods or services.

Licensing

A business arrangement where one party allows another to use its trademark, patent, copyright, or technology in exchange for a fee or royalty.

Legal Process

The procedures and activities involved in enforcing the law, including litigation, adjudication, and the application of legal principles in courts.