1. Hill Top Lumber Company is considering building a sawmill in the state of Washington because the company doesn't have such a facility to service its growing customer base that is located on the west coast. Hill Top's executives believe that future growth in west coast customers will make the sawmill project a good investment. When evaluating the acceptability of the project, which of the following would be considered a relevant cash flow that should be included when determining its initial investment outlay?
A Hill Top spent $150,000 to prepare the feasibility report of the project
B The annual cash inflow of $2 million from another existing project that will continue unaffected by the new project
C The cost of an existing debt of the firm that will annually increase by 0.3 percent as per the lending terms of the debt
D The cost of $3 million incurred to clear the land on which Hill Top wants to build the sawmill
E It is estimated that $20 million of business from exisiting customers will move to the new sawmill
2. Sunshine Corp. announces a 2-for-1 stock split for its shares trading at $100. If the current number of shares outstanding is 200,000, then the new market price of the share will be ____.
A $100
B $300
C $50
D $20
E $70