Question: Our textbook and lesson discuss some considerations that should be taken into account when doing capital budgeting. Incremental earnings, interest expenses, taxes, opportunity costs, externalities,
Our textbook and lesson discuss some considerations that should be taken into account when doing capital budgeting. Incremental earnings, interest expenses, taxes, opportunity costs, externalities, sunk costs, cannibalization or erosion, depreciation, and salvage value; as well as others. Explain in detail what defines capital budgeting. Then, explain how two of these considerations above affect capital budgeting.
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