A comapny is considering a proposed expansion to its facilities.
Which of the following statements is most correct?
a. In calculating the projects operating cash flow, the firm should not substract out financing cost such as interest expense, since these cost are already included in the WACC, which is used to discount the projects net cash flow.
c. When estimating the projects operating cash flows, it is important to include any oppportunity cost and sunk cost, but the firm should ignore cash flows exptenalities since they are accounted for eleswhere.
d. Statements a and c are correct.
e. None of the statements aboe is correct.
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