Project cash flows used in the capital budgeting decision include all of the following EXCEPT
A)past research and development costs.
B)depreciation.
C)increase in capital expenditures.
D)changes in working capital.

Question

Quizplus · Accepted Answer

Past research and development costs are not relevant to the project cash flows used in capital budgeting because they are sunk costs that have already been incurred and cannot be recovered. The other options (depreciation, increase in capital expenditures, and changes in working capital) can all affect the cash flows of the project and are therefore important to consider in capital budgeting decisions.

Project Cash Flows Used in the Capital Budgeting Decision Include