The annual annuity stream of payments that has the same present value as a project's costs is referred to as which one of the following

Which one of the following best describes the concept of erosion?    A.  expenses that have already been incurred and cannot be recovered B.  change in net working capital related to implementing a new project C.  the cash flows of a new project that come at the expense of a firm's existing cash flows D.  the alternative that is forfeited when a fixed asset is utilized by a project E.  the differences in a firm's cash flows with and without a particular project Refer to section 10.2

6.

Which one of the following best describes pro forma financial statements?    A.  financial statements expressed in a foreign currency B.  financial statements where the assets are expressed as a percentage of total assets and costs are expressed as a percentage of sales C.  financial statements showing projected values for future time periods D.  financial statements expressed in real dollars, given a stated base year E.  financial statements where all accounts are expressed as a percentage of last year's values Refer to section 10.3

7.	Which one of the following is the depreciation method which allows accelerated write-offs of property under various lifetime classifications?    A.  IRR B.  ACRS C.  AAR D.  straight-line to zero E.  straight-line with salvage Refer to section 10.4

8.

The depreciation tax shield is best defined as the:    A.  amount of tax that is saved when an asset is purchased. B.  tax that is avoided when an asset is sold as salvage. C.  amount of tax that is due when an asset is sold. D.  amount of tax that is saved because of the depreciation expense. E.  amount by which the aftertax depreciation expense lowers net income. Refer to section 10.5

9.	The annual annuity stream of payments that has the same present value as a project's costs is referred to as which one of the following?    A.  yearly incremental costs B.  sunk costs C.  opportunity costs D.  erosion cost E.  equivalent annual cost Refer to section 10.6