In the chapter on cash flows, several terms were introduced that were important to understand to build an appropriate cash flow model for further analysis. Please explain the meaning of the following terms and tell me if they should be included in the calculation of incremental cash flows. Explain why or why not. Sunk Costs. Depreciation Financing Costs. Externalities.

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1 Sunk Costs Sunk costs are costs that have already been incurred and cannot be recovered These cost... View the full answer