2.What effects can capital-budgeting decisions have on a company? 3. Give an example of an out-of-pocket cost and a sunk cost by describing a situation in which both are encountered. 4. A machine is being considered for purchase. The salesperson attempting to sell the machine says that it will pay for itself in five years. What is meant by this statement? 5. Discuss the limitations of the payback period method. 6. What role does the cost of capital play in the time-adjusted rate of return method and in the net present value method? 7. What is the fundamental principle of responsibility accounting? 8. List five important factors that should be considered in designing reports for a responsibility accounting system. 9. Describe a segment of a business enterprise that is best treated as an expense center. List four indirect expenses that may be allocated to such an expense center. 10. What is the advantage of using investment centers as a basis for performance evaluation?