Question

Interest expenses incurred on debt financing are Blank______ when computing cash flows from a project.

Multiple choice question.

treated as cash outflows


spread over the life of the project


treated as cash inflows


ignored

Answer 1

In the context of computing cash flows from a project, interest expenses incurred on debt financing are typically **ignored**.

The reasoning behind this is that cash flows from a project are evaluated on an operational basis without considering financing costs. Instead, financing arrangements are often analyzed separately from the project’s operational cash flows.

So, the correct answer is:

**ignored**