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Author Question: A company is considering a proposed new plant that would increase productive capacity. Which of the ... (Read 80 times)

shivanipalawai@gmail.com

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on: Aug 7, 2023
A company is considering a proposed new plant that would increase productive capacity. Which of the following statements is correct?

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When estimating the project’s operating cash flows, it is important to include any sunk costs, but the firm should ignore opportunity costs and cash flow effects of externalities since they are accounted for in the discounting process.


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Since depreciation is a noncash expense, the firm does not need to deal with depreciation when calculating the operating cash flows.


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In calculating the project’s operating cash flows, the firm should not deduct financing costs such as interest expense, because financing costs are accounted for by discounting at the WACC. If interest were deducted when identifying relevant cash flows, it would in effect be “double-counted.”


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The WACC used to discount cash flows in a capital budgeting analysis should be calculated on a before-tax basis.

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

kalimarie

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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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shivanipalawai@gmail.com

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

daiying98

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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