12-10 “Depreciation expenses have no effect on cash flows and, therefore, are not relevant in capital expenditure analysis.” Do you agree? Why or why not? 12-11 Should the firm accept the independent...

12-10 “Depreciation expenses have no effect on cash flows and, therefore, are not relevant in capital expenditure analysis.” Do you agree? Why or why not?

12-11 Should the firm accept the independent projects described below? Why or why not? (a) The firm’s cost of capital is 10% and the estimated internal rate of return (IRR) of the project is 11%. (b) A capital project requires a $150,000 initial investment. The firm’s cost of capital is 10% (after-tax), and the present value of the expected after-tax cash inflows from the project is $148,000.