A Company Is Considering an Expansion Project

Multiple Choice

A company is considering an expansion project. The company's CFO plans to calculate the project's NPV by discounting the relevant cash flows (which include the initial up-front costs, the operating cash flows, and the terminal cash flows) at the company's cost of capital (WACC) . Which of the following factors should the CFO include when estimating the relevant cash flows?

A) Any sunk costs associated with the project.
B) Any interest expenses associated with the project.
C) Any opportunity costs associated with the project.
D) Answers b and c are correct.
E) All of the answers above are correct.