Assignment
a. How is the pro forma statement we used in this chapter for computing OCF different from an accountant's income statement?
b. Suppose you paid your old college finance professor to evaluate a project for you. If you would pay him regardless of your decision concerning whether to proceed with the project, should his fee for evaluating the project be included in the project's incremental cash flows?
c. Why does a decrease in NWC result in a cash inflow to the firm?
d. Everything else held constant, would you rather depreciate a project with straight-line depreciation or with DDB?
e. Everything else held constant, would you rather depreciate a project with DDB depreciation or deduct it under a Section 179 deduction?
f. In a replacement problem, would we ever see changes in NWC?
g. In a replacement problem, will incremental net depreciation always be less than the gross depreciation on the new piece of equipment?
h. In a cost-cutting proposal, what might cause you to sometimes have negative EBIT?
Format your assignment according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.