In order to purchase new equipment firm must borrow money, Financial Management

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In order to purchase new equipment firm must borrow money

1. In order to purchase new equipment, a firm must borrow money. The interest expense and its tax consequences should both be included in a capital budgeting analysis.

a) True

b) False

2. One of the costs of a proposed new product line is that additional service reps will need to be hired. The cost of both the new and the existing service reps should be included in a capital budgeting analysis.

a) True

b) False

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Financial Management: In order to purchase new equipment firm must borrow money

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