Only include as 'incremental expenses' in your capital budgeting analysis the additional overhead expenses that arise because of the decision to take on the project.

Question

Quizplus · Accepted Answer

Incremental expenses refer to the additional expenses that are incurred due to a new project. In capital budgeting analysis, only those expenses should be included that arise because of the decision to take on the project, and not the expenses that would exist even without the project.

Only Include as 'Incremental Expenses' in Your Capital Budgeting Analysis