Which of the following should NOT be included in a capital budgeting analysis? a. Changes in...
Which of the following should NOT be included in a capital budgeting analysis?
a. Changes in existing toothpaste sales as a result of new, innovative, toothpaste.
b. The opportunity cost of being able to sell a parcel of land instead of building a new project on the same piece of land.
c. Research and development costs that are applied to all projects, even though the project does not require R&D.
d. Shipping and installation costs.
Homework Answers
The answer is
c. Research and development costs that are applied to all projects, even though the project does not require R&D.
Relevant costs are included in the capital budgeting analysis
Allocated costs are not included since not incurred for the project
Rest all are incremental/Opportunity costs relevant for the analysis
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Which of the following should NOT be included in a capital
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