Posted: July 13th, 2022

Business & Finance Assignment | Custom Assignment Help

CF Estimation. In which of the following situations would a firm’s net cash flow from a capital project be affected? a. A firm spent $5,000 in the previous year in a training program for a group of six engineers who will operate a highly computerized production machinery now being evaluated b. A firm will borrow $80,000 toward the purchase of a new milling machine. The loan will be amortized over the economic life of the equipment at an interest rate of 8 percent producing a first year’s interest payment of $6,400 c. A new high tech manufacturing equipment will replace an existing one. The annual insurance premium on the existing equipment is $1,000. The replacement equipment would also require an annual insurance cost of $1,000 d. None of the above cash flows would be considered an incremental net cash flow in capital budgeting

a) $5000 spent on training program will not affect the cash flows as it is already incurred in previous year and is a sunk costb) Borrowing of $80000 for purchasing a new machine will affect cash. Get 

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