In an internal project, the profit or potential profit must take into account any expenses incurred or possible detrimental factors. If you purchase equipment, its cost will detract from the profit made from any project dependent upon that new equipment.
Profit itself can be defined as the economic value added to the organization when taxes and capital costs have been deducted. There are implicit, imputed and notional costs to be considered. Has the internal project prevented the equipment or staff from earning income that would have come had they been engaged elsewhere?
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