When evaluating a capital budgeting project, installation costs of a new machine must be considered as part of ________.

Question

Quizplus · Accepted Answer

Installation costs of a new machine are considered a part of the initial investment in a capital budgeting project. This is because the installation cost is a one-time expense incurred at the beginning of the project and is not a recurring operating cost. The initial investment represents the total cost required to start the project and includes all expenses necessary to acquire and prepare the asset for use.

When Evaluating a Capital Budgeting Project, Installation Costs of a New