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Cape Cod Cranberries Will Finance a New Organic Juice Production

Question 78

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Cape Cod Cranberries will finance a new organic juice production facility with a $10,000,000 bond issue. Interest on the bonds will be $637,500 per year for the life of the project. Should the interest payments be subtracted from the project's incremental cash flows?

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The cost of interest is implicitly built...

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