Solutions to Chapter 1

b. One reasonable approach would be to assess a cost to the space equal to the rental income that the firm could earn if it allowed another firm to use the space. This is the opportunity cost of the space. 13. Cash flow = net income + depreciation – increase in NWC. 1.2 = 1.2 + 0.4 – (NWC ( (NWC = $0.4 million ................
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