Change in Interest Rates:
No, finance costs related to one particular project, should not be considered while estimating the incremental cash flows of the project. Hence, all the expenses related to financing, i.e. interest expenses should be ignored. Important to note, if the manufacturer wishes to include debt financing, the cost of the same shall be reflected in the cost of capital/discount rate that is used to discount the cash flows calculated.
The cost of studying the golf clubs will be categorized as sunk costs and hence, this cost will not be included at the Continue reading...