Cape Cod Cranberries will finance a new organic juice production facility with a $10,000,000 bond issue. Interest on the bonds will be $637,500 per year for the life of the project
Should the interest payments be subtracted from the project's incremental cash flows?
Answer: The cost of interest is implicitly built in to the project's cost of capital which will be used to discount the cash flows to their present value. If interest were subtracted from the expected cash flow, it would be counted twice and the project unfairly penalized.
Business
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What is the main source of corporate financing in the United Kingdom?
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When a consent order issued by the Federal Trade Commission is signed, the company has agreed to a corrective advertising program
Indicate whether the statement is true or false
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