NPV -Interest Cost

WACC is a mix of the cost of loans and the cost of equity. The cost of equity takes account of dividends and the cost of loans take account of interest. Therefore, when using WACC neither interest nor dividends should appear in the cash flows. If there are both equity and loans in a company's finance, WACC should be used as the discount rate. It is usually regarded as incorrect to match a specific type of finance to a project as, long-term, the WACC will stay about constant. To match finance to projects is an accident of timing.