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dear tutor
in the question 31 (a) (i) of the September 2016 spicem exam, the solution has included the fixed operating costs in the net present value calculations, why is it included because its not incremental through out the years?
best regards
But they are incremental!
The question says that they are “relating to this investment proposal” and therefore they are extra fixed overheads that will only be incurred is they go ahead with the new investment.
i think i did not get the basis well,now i see it differs from the fixed cost incurred at year 0
thanks John
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