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Financial analysis generates various indicators based on economic cash flow. Assuming the analyst has confirmed the appropriate discount rate, and applies this in economic models,
Financial analysis generates various indicators based on economic cash flow. Assuming the analyst has confirmed the appropriate discount rate, and applies this in economic models, which of the following might cause the analyst to misinterpret the indicators? 1) Management is not familiar with financial analysis and insists that all projects have an IRR higher than cost of capital O2) Confusion between ongoing operating expenses and initial capital expenditures 3) NPV of project A, is compared to the NPV of project B ( 4) Sources of financing for the project ( 5) The selected discount rate is the cost of capital
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