In Estimating Cash Flows, the Firm Should Exclude

question 155

Multiple Choice

In estimating cash flows, the firm should exclude:

• A)the interest expense on debt financing.
• B)opportunity costs.
• C)sunk costs.
• D)a and c
• E)a, b, and c

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Definitions:

Trism

Involuntary muscle spasm of the jaw muscles, leading to difficulty in opening the mouth; often referred to as trismus.

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A disease characterized by the uncontrolled growth and spread of abnormal cells in the body.

Latin

An ancient Italic language historically spoken in the Roman Empire, now used primarily in Vatican City and as a liturgical language in the Roman Catholic Church.

Lobster

A marine crustacean with a long body, muscular tail, and live in burrows on the sea floor.