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dear sir,
May you explain why havent the answer taken loan interest payment into consideration?
Note 8
We never take account of interest payments in the cash flows.
The reason is that the cost of the interest is taken into account when calculating the WACC – to include it in the cash flows would be accounting for it twice.Do watch my free lectures – they are a complete free course for Paper FM and cover everything needed to be able to pass the exam well 🙂
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