A corporation donates a valuable painting from its

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A corporation donates a valuable painting from its private collection to an art museum. Which of the following are incremental cash flows associated with the donation? (LO9-1)a. The price the firm paid for the paintingb. The current market value of the paintingc. The deduction from income that it declares for its charitable gift d. The reduction in taxes due to its declared tax deduction
6Measuring cashflowsRemember opportunity costs Any cashflow that the firm gives up if it takes the project. Conference Services Inc. has leased a large office building for $4 million per year. The building is larger than the company needs; two of the building's eight stories are almost empty. A manager wants to expand one of her projects, but this will require using one of the empty floors. In calculating the net present value of the proposed expansion, senior management allocates one-eighth of $4 million of building rental costs (i.e., $.5 million) to the project expansion, reasoning that the project will use one-eighth of the building's capacity. (LO9-1)a.Is this a reasonable procedure for purposes of calculating NPV?b.Can you suggest a better way to assess a cost of the office space used by the project?
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Example Boeing is negotiating with Air Canada over the price of 20 new 737s. Air Canada offers $40 million per plane. Based on past data, Boeing estimates that the average cost of a new 737 is $30 million in labor and materials. How valuable is the Air Canada offer?

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