State the concept of exclusion of Financing Cost Principle.
CA Intermediate · Financial Management and Strategic Management · PYQS · January 2025
State the concept of exclusion of Financing Cost Principle.
Suggested Answer and Working Notes:
The exclusion of financing costs principle means that: (i) The interest on long-term debt is ignored while computing profits and taxes. (ii) The expected dividends are deemed irrelevant in cash flow analysis.
Topics: Part-A: Financial Management
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