Question

Which of the following statements is/are FALSE? I) When evaluating a capital budgeting decision, we generally include interest expense. II) 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. III) As a practical matter, to derive the forecasted cash flows of a project, financial managers often begin by forecasting earnings.

Answer 1

Answer:

option I: When evaluating a capital budgeting decision, we generally include interest expense.

Explanation:

Capital budgeting can simply be defined as the process by which a  company evaluates prospective expenditures or investments that will be of a lucrative deal to the company. they are any project undergo by firms or companies that will bring  a great deal of money and value to the company.

capital budgeting decisions usually are of different kinds as it  ranges from mutually exclusive projects,accept-reject decision  or acceptance rule and the  capital rationing decision

capital budgeting covers the process of investing money for the company with the view that or of generating positive returns and does not include interest expense.