A Company Is Considering a Proposed New Plant That Would

question 7

Multiple Choice

A company is considering a proposed new plant that would increase productive capacity.Which of the following statements is CORRECT?

• A) In calculating the project's operating cash flows,the firm should not deduct financing costs such as interest expense,because financing costs are accounted for by discounting at the WACC.If interest were deducted when estimating cash flows,this would,in effect,"double count" it.
• B) Since depreciation is a non-cash expense,the firm does not need to deal with depreciation when calculating the operating cash flows.
• C) When estimating the project's operating cash flows,it is important to include both opportunity costs and sunk costs,but the firm should ignore the cash flow effects of externalities since they are accounted for in the discounting process.
• D) Capital budgeting decisions should be based on before-tax cash flows because WACC is calculated on a before-tax basis.
• E) The WACC used to discount cash flows in a capital budgeting analysis should be calculated on a before-tax basis.To do otherwise would bias the NPV upward.

Explain the phenomenon of interference in memory recall.

Recognize the components of the information-processing model of memory.

Understand the implications of psychological conditions and therapies on memory.

Understand the capacity and duration of different types of memory (iconic, short-term, long-term).

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Definitions:

Shame

A painful emotion resulting from the consciousness of wrong or foolish behavior or the perception of being inferior.

Narcissistic Personality Disorder

A mental disorder characterized by a long-term pattern of exaggerated self-importance, need for admiration, and a lack of empathy.

Narcissistic Personality Disorder

A mental condition in which people have an inflated sense of their own importance, a deep need for excessive attention and admiration, coupled with a lack of empathy for others.

Fantasies of Power

Mental imaginations or daydreams focused on having control, influence, or authority over others or situations.