Interest expenses are not included as incremental free cash flows because the cost of funds is recognized as cash flows are discounted back to present value.

Name: Interest expenses are not included as incremental free cash flows because the cost of funds is recognized as cash flows are discounted back to present value.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Interest expenses are already taken into account when discounting future cash flows to present value, so they do not need to be separately included as incremental free cash flows.

Interest Expenses Are Not Included as Incremental Free Cash Flows