Cost Allocation For Capital Budgeting Decisions Tim Baldenius ∗ Sunil Dutta † Stefan Reichelstein ‡ September 2006 * Graduate School of Business, Columbia University, tb171@columbia.edu † Haas School of Business, University of California at Berkeley, dutta@haas.berkeley.edu ‡ Graduate School of Business, Stanford University, reichelstein@stanford.edu We thank seminar participants at the following universities: Columbia, Washington, Ohio State, Boston, Duke, Michigan State and the Norwegian School of Business and Economics for their many comments on this paper. We are also grateful for detailed suggestions from two anonymous reviewers and the editor, Jack Hughes.