Question

Which of the following is not subtracted from sales revenues to determine pretax profit for capital budgeting purposes? Question 20 options:

depreciation

fixed costs

interest expense

variable costs

Answer 1

Capital budgeting process will not be taking interest expense into consideration while determination of any of the process you like in net present value, or internal rate of return because interest cost is believed to be are non operating expenses and it is not taken into consideration for the capital budgeting process.

depreciation is considered in this process as well as variable costs and fixed costs are also considered.

Correct answer will be option (C) Interest expenses