Assuming that a business has a project with anticipated positive net annual operating cash flows,assuming all other factors remain the same,the inclusion of income taxes in the capital budgeting analysis will:
A) have no impact on the net present value.
B) decrease the net present value.
C) increase the net present value.
D) not be determinable.

Question

Quizplus · Accepted Answer

The inclusion of income taxes in the capital budgeting analysis will decrease the net present value, as taxes reduce the net cash inflows available for distribution to the shareholders, resulting in lower net present value.

Assuming That a Business Has a Project with Anticipated Positive