[alojants]

Thank you!

[alojants]

Hello sir. First of all I what to thank you for your useful lectures and support.
My question is regarding Tampem (Dec. 06) part (a) Calculate NPV and APV of the proposed investment.

I understand that with APV, the base case NPV is calculated assuming that it is all equity financed (so no interest), but when we calculate NPV using WACC as discount rate why we do not deduct the interest cost before discounting it?

[alojants]

Thank you that you find the time to answer.

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