Question

Which of the following statements is​ FALSE? A. When evaluating a capital budgeting​ decision, we generally include interest expense. B. 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. C. As a practical​ matter, to derive the forecasted cash flows of a​ project, financial managers often begin by forecasting earnings. D. Many projects use a resource that the company already owns.

Answer 1

Answer: From the given options, the following statement is​ false:  When evaluating a capital budgeting​ decision, we generally include interest expense.

It is a process that organization set about to measure possible projects or investments. Under this we generally do not include interest expense.

Therefore , the correct option here is (a) i.e. When evaluating a capital budgeting​ decision, we generally include interest expense.