Which of the following statements is correct?

only incremental cash flows are relevant in project analysis, the proper incremental cash flows are the reported accounting profits, and thus reported accounting income should be used as the basis for investor and managerial decisions.

it is unrealistic to believe that any increases in net working capital required at the start of an expansion project can be recovered at the project's completion.

working capital like inventory is almost always used up in operations. thus, cash flows associated with working capital should be included only at the start of a project's life.

if equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. in this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.

changes in net working capital refer to changes in current assets and current liabilities, not to changes in long-term assets and liabilities. therefore, changes in net working capital should not be considered in a capital budgeting analysis.

if an asset is sold for less than its book value at the end of a project's life, it will generate a loss for the firm, hence its terminal cash flow will be negative.

The starr theater, owned by meg vargo, will begin operations in march. the starr will be unique in that it will show only triple features of sequential theme movies. as of march 1, the ledger of starr showed: cash $3,150, land $22,000, buildings (concession stand, projection room, ticket booth, and screen) $10,000, equipment $10,000, accounts payable $7,300, and owner’s capital $37,850. during the month of march, the following events and transactions occurred.mar. 2 rented the three indiana jones movies to be shown for the first 3 weeks of march. the film rental was $3,600; $1,600 was paid in cash and $2,000 will be paid on march 10.3 ordered the lord of the rings movies to be shown the last 10 days of march. it will cost $200 per night.9 received $4,500 cash from admissions.10 paid balance due on indiana jones movies rental and $2,200 on march 1 accounts payable.11 starr theater contracted with adam ladd to operate the concession stand. ladd is to pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand.12 paid advertising expenses $900.20 received $5,100 cash from customers for admissions.20 received the lord of the rings movies and paid the rental fee of $2,000.31 paid salaries of $2,900.31 received statement from adam ladd showing gross receipts from concessions of $6,000 and the balance due to starr theater of $900 ($6,000 × 15%) for march. ladd paid one-half the balance due and will remit the remainder on april 5.31 received $9,200 cash from customers for admissions.1.) enter the beginning balances in the ledger.2.) journalize the march transactions. starr records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense. (credit account titles are automatically indented when the amount is entered. do not indent manually. record journal entries in the order presented in the problem. if no entry is required, select "no entry" for the account titles and enter 0 for the amounts.)3.) post the march journal entries to the ledger. (post entries in the order of journal entries presented in the previous question.)