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Is cost of sales a relevant cash flow in decision making for project appraisal? how should it be treated in calculating net cash flows?
It depends what is included in the figure for cost it sales.If depreciation is included,for example,in the figure of cost of sales this part of it would have to be stripped out of calculation as depreciation is not a cash flow.Anything you put into calculation of this type should fulfill following three characteristics-
It should be a cash flow,it should be avoidable and it should be a future cost or revenue.
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