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CAPITAL-BUDGETING5 MIN READ

Sort Capex Inputs: Include, Exclude, Separate

Classify common project inputs into DCF treatment buckets.

Place each project input in the DCF treatment bucket it belongs to. Include in cash flow Exclude from decision Separate tax or non-cash treatment Sensitivity driver $300K equipment purchase paid at approval $120K feasibility study paid last quarter and non-refundable Depreciation schedule that creates a tax shield Forecasted customer adoption rate for the new line Forgone rent from using a bay that could be subleased Corporate overhead allocation that will not change Inventory build required before launch and released at shutdown Salvage value range for equipment in year five

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