How Is Interest Expense That Is Associated with a Project

question 109

Multiple Choice

How is interest expense that is associated with a project treated in the capital budgeting process?

• A) It is treated as a cash outflow when estimating the incremental cash flows associated with a project.
• B) It is built into the discount rate.
• C) It is considered a synergistic incremental cash flow.
• D) Interest expense is not relevant to any capital budgeting decisions.

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Definitions:

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