This is a principle of capital budgeting which states that the calculations of cash flows should remain independent of financing.
A) generally accepted accounting principle
B) financing principle
C) separation principle
D) WACC principle

Question

Quizplus · Accepted Answer

The Separation principle states that the calculation of cash flows for a capital budgeting project should be done independently of the financing used to fund the project. This ensures that the decision to invest in a project is based on its inherent profitability rather than the method of financing used. The other options listed are not applicable to this principle.

This Is a Principle of Capital Budgeting Which States That