(TCO 4) The postponement of a project until conditions are more favorable: is not a valuable option. is referred to as the option to extend.

1. (TCO 4) The postponement of a project until conditions are more favorable: is not a valuable option. is referred to as the option to extend. could cause a negative net present value project to become a positive net present value project. will generally cause the internal rate of return for a project to decline. 2. (TCO 4) ____________, refers to the situation a firm faces when it has positive net present value projects, but cannot obtain financing for those projects. capital planning. soft rationing. capital rationing. hard rationing. a sunk cause. 3. (TCO 4) Assume Company X plans to invest $60,000 in industrial equipment. Using Tables 9.6 and 9.7 of your textbook (Page 277), which is the first year depreciation amount under MACRS? $12,000 $8,574 $19,800 None of the above 4. (TCO 1 and 4) Assume a corporation has earnings before depreciation, and taxes of $100,000, depreciation of $40,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company? $82,000 $110,000 $42,000 none of these .70 .90