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A Incremental cash flows are considered B Sunk costs are ignored C Opportunity costs are excluded D Relevant cash flows are considered
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Solution
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Capital budgeting decisions involve huge funds and are long term decisions. As they involve huge costs one wrong decision would have a big effect on the business. They include all the potential expenses/costs. It includes opportunity cost, actual cost, incremental and relevant cash flows. It does not include sunk costs.
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