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—I 15. Relevant cash flow: A! Aa a WhlEl‘l of the following represent the eFFect of the current project’s acceptance on the cash flows of Kellogg Systems Inc.’s ether projects?

‘—I 15. Relevant cash flow: A! Aa a WhlEl‘l of the following represent the eFFect of the current project’s acceptance on the cash flows of Kellogg Systems
Inc.’s ether projects? [They can be either positive or negative, and because they depend on whether the current
project is acceptedI they should be included in the analysis.) 0 An extemality
O Opportunity costs
0 Sunk costs Which of the following factors should Kellogg Systems Inc. include in its capital budgeting analysis? Check all that
apply. I:I Kellogg’s annual interest expense is $3 million. which is partly due to debt raised for this project. I:| Kellogg expects its accounts receivable to increase by $?U,CIDCI as a result of the project. |:| Kellogg’s preferred stock pays $1SD,D{]{] in dividends each year. I:| If the current project is accepted, Kellogg will be forced to sell one of its existing divisions to satisfy
antimonopoly requirements.

 
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