Factor -1: Before making the final calculations, Moon and Sun discussed the net present value analysis for the projects SchoolStreet is considering. Moonn tells Sun that we should include any financial flows such as interest expense or dividends paid to the investors who furnished the capital for the project under consideration.

	A.	Yes, operating cash flow is calculated by adding back all non-cash transactions to net income, which excluded interest expense because interest expense is tax deduct edible.
	B.	No, the return required by the investors provided the capital is already accounted for when we applied the 10 % discount rate, as a result, including financing cash flows would be double counted.
	C.	Yes, if 10% borrowing cost of capital was not included on the analysis, net income and operating cash flows would have been reduced and the income tax would have been higher.