Including Flotation Costs into the Net Present Value of a Project

question 197

Multiple Choice

Including flotation costs into the net present value of a project will:

• A) Not affect that net present value.
• B) Increase the net present value of the project.
• C) Increase the discount rate applied to the project thereby lowering the project's net present value.
• D) Increase the initial cash outflow of the project thereby lowering the project's net present value.
• E) Affect the net present value but the direction of that impact cannot be determined.

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