标题: Capital Budgeting - Accounting Income [打印本页]

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作者: former    时间: 2011-7-11 19:40     标题: Capital Budgeting - Accounting Income

Hi,

I know capital budgeting decisions are based on Cash flows and not accounting income but how do you calculate accounting income for a projcet?

Thanks

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作者: maryli    时间: 2011-7-11 19:40

The same way you calculate any accounting income.

Revenue - COGS - SG&A - Interest - Tax = Net Income.

You would include Interest in accounting income but not in assessing cash flows for the purposes of calculating NPV of a project.

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