To expand sales, Sandine Corporation is evaluating whether to purchase a machine to manufacture a new product line. Which of the following statements is correct concerning an expansion analysis like the one Sandine faces?
A. The machine's annual depreciation expenses will be deducted from the firm's net income to calculate its supplemental operating cash flows.
B. The new machine will be acceptable as long as the sum of its net cash flows is positive.
C. The shipping and installation costs associated with purchasing the new machine are included in the computation of its initial investment outlay.
D. The cost of a feasibility study that Sandine conducted last year to determine whether to further evaluate the introduction of the new product line should be included in the calculation of the new machine's initial investment outlay.
E. The salvage value of the new machine should be included in the computation of its initial investment outlay.
Answer: C
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