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26. Assume a firm has an ongoing need for a machine and the currentmachine is operating efficiently. The firm should plan to replace this machinewhen it: 27.The book value of an asset is primarily used to compute the:
28. The sale of an asset creates an aftertax cash flow in an amount equal tothe: 29.The pretax salvage value of an asset is equal to the: 30.All else equal, a project's operating cash flow will increase when the: 31.The cash flows of a project should:
32. Which of the following are correct methods for computing the operatingcash flow of a project assuming that the interest expense is equal to zero?I. EBIT + Depreciation - TaxesII. EBIT - Depreciation + TaxesIII. Net Income - DepreciationIV. [(Sales - Costs) × (1 - Tax rate)] + [Depreciation × Tax rate] 33.The bottom-up approach to computing the operating cash flow of a projectapplies only when: