A capital budgeting project's incremental net income computation for purposes of determining incremental tax expense includes immediate cash outflows for initial investments in equipment.

Question

Quizplus · Accepted Answer

Incremental net income computation for tax purposes includes revenues and expenses related to the project's operations but does not directly include immediate cash outflows for initial investments in equipment, as these are capitalized and depreciated over time, not expensed immediately.

A Capital Budgeting Project's Incremental Net Income Computation for Purposes