Which one of the following categories would be least likely to require annual adjustments in a capital budgeting analysis due to the effects of inflation?
A) Sales
B) Expenses
C) Working capital
D) Depreciation expense

Question

Quizplus · Accepted Answer

Depreciation expense is typically a non-cash expense and does not change with inflation. Therefore, it is least likely to require annual adjustments in a capital budgeting analysis. In contrast, sales, expenses, and working capital are all affected by inflation and would need to be adjusted accordingly.

Which One of the Following Categories Would Be Least Likely