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To help distinguish opportunity costs and incremental cash flows, consider these four examples:
1) A firm spends $100,000 on a project, when it could invest the money and earn a 10% return.
2) A firm is renting out office space for $5,000/month, but will use the office space for a new project.
3) A firm will hire a new employee for $100,000/year to head up a new project.
4) A firm paid $100,000 five years ago, but the land is unusable for the current project.
Which of these are opportunity costs? Which are incremental cash flows?
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One-year zero coupon treasury bonds are selling for £975.61 in the U.K. and for $963.86 in the U.S. Assume $1,000 face value in dollars for the U.S. bond and £1,000 face value for the U.K bond, and round interest rates to two decimal places, e.g. 2.5..
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You have $21,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 10 percent and Stock Y with an expected return of 12.5 percent. If your goal is to create a portfolio with an expected return of 10.95 percent, how m..
writing a business plan to create financials as part of the business plan.section 1 start-up expenses and
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