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