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I have studied on various places in book that do not account for interest payment as it is already accounted in cost of capital.
Can you please tell we what is procedure for interest receipts or income? Like if we get interest so should be ignore or do we need to show in NPV calculations?
Thank you.You are referring to the calculations of the net cash flows.
As you have read (and as I explain in my free lectures) we do not account for interest paid on borrowings because since it is included in the calculation of the WACC it would be accounting for it twice.
Interest received is nothing to do with the cost of finance and therefore is included in the calculation of the net cash flows as are all other cash receipts.
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