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In capital budgeting financing costs associated with incremental cash flows: need to be included in the cash flows that are discounted because they will not

In capital budgeting financing costs associated with incremental cash flows:

need to be included in the cash flows that are discounted because they will not occur if the project is rejected.
are factored into the discount rate
are not included in the cash flow figures because they are not relevant cash flows
lead to distortions in the capital budgeting decision

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