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Why Do a Project's Net Cash Flows Not Include Additional

Question 26

Multiple Choice

Why do a project's net cash flows not include additional interest expense?


A) Interest expense is a sunk cost and thus not relevant.
B) Interest expense is not an actual cash expense.
C) Interest expense is an indirect cost and thus not relevant.
D) Interest expense is taken into account by the use of a required rate of return used in the decision method.

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