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Author Question: What is the correct rule for capital budgeting analysis? (Read 73 times)

meganh99

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on: Aug 7, 2023
What is the correct rule for capital budgeting analysis?

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The interest paid on funds borrowed to finance a project must be included in the project's estimated cash flows.


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Only incremental cash flows are relevant when making accept/reject decisions.


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Sunk costs are not included in the annual cash flows, but they must be deducted from the PV of the project's other costs when reaching the accept/reject decision.


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If a product is competitive with some of the firm's other products, this fact should be incorporated into the estimate of the relevant cash flows. However, if the new product is complementary to some of the firm's other products, this will have no effect on the cash flows used in the analysis.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by meganh99 on Aug 7, 2023

Afvelasquez

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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meganh99

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review

sarah_brady415

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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