Any capital budgeting decision should depend solely on a project's forecasted cash flows and the firm's required rate of return. Such a decision should not be affected by managers' tastes, the choice of accounting method, or the profitability of other independent projects.

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Capital budgeting decisions should be based on the projected cash flows and the required rate of return of the project. Factors such as the personal preferences of managers, accounting methods, and the profitability of other unrelated projects should not influence the decision-making process. The focus should be on the financial viability of the project and its potential contribution to the company's long-term objectives.

Any Capital Budgeting Decision Should Depend Solely on a Project's