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I know we aren’t supposed to include fixed costs in the cashflows but what about inflated fixed cost cashflows? Do we include that?
If the total fixed costs to the company increase as a result of the project then the extra is included in the cash flows. If the total fixed costs do not change then they are not relevant.
So if the total is going to inflate anyway whether or not they do the project then they are not relevant.
It depends on the exact wording of the question.
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