A.TRUE/FALSE (Each question 4 total 28 p) 1. Because installment costs of a new asset are a current cash expense, they are excluded from the initial outlay. 2. When an old asset is sold for exactly its depreciated value, the only taxable income is the difference between the initial cost of the machine and the selling pric The initial outlay involves the immediate cash outflow necessary to purchase the asset and put it in operating order. 3. 4. Cash flows associated with a project's termination generally include the salvage value of the project plus or minus any taxable gains or losses associated with its sale. 5. Additional cash needed to fill increased working capital requirements should be included in the initial cost of a product when analyzing an investment. 6. Capital rationing can occur when profitable projects must be rejected because of shortage of capital. 7. Sunk costs are a type of incremental cash flow that should be included in all capital-budgeting decisions