Chapter 11

3. A metric used comparing mutually exclusive projects with different lives
6. Actual dollar amounts received or paid
9. The principle that allows us to treat each project independently from the firm
10. Estimated value of a physical asset at the end of its useful life
11. Non-physical assets such as patents, brands and goodwill
13. Cannibalization or ___ side effect
17. Difference between total FCF with and without a project
18. Also known as operating profits
19. Past expenses that are unrecoverable and irrelevant to future decisions
20. Positive side effect

1. Lost cash inflows that arise from choosing one project over the next best alternative
2. These (financial) charges must be excluded in estimating cash flows from a project
4. Assets expected to be converted into cash within a year
5. Costs that change directly with level of output
6. CF measure of the incremental net income from the project excluding the effects of interest expense
7. Actual cash a project generates from its operations after accounting for all income taxes
8. Methods include straight-line, double-declining, units of production, etc.
12. Cash flows adjusted for inflation to reflect the true purchasing power
14. Costs that stay the same regardless of production level
15. Physical assets such as buildings, machinery, inventory you can touch, with clear market value and depreciation
16. CFs from ___ are CFs after all operating expenses and taxes but before any outflows for investments and working capital