Flotation Costs

question 16

Multiple Choice

Flotation costs:

• A) Reduce each of the cash inflows for a project.
• B) Represent a recovery item at the end of a project.
• C) Should be ignored as they are a financing cost, not a project cost.
• D) Increase a project's cost of capital.
• E) Should be included as an initial cash outflow of the project.

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Definitions:

Consistency

The quality of always behaving or performing in a similar way, maintaining a standard.

Consistency

The quality of always behaving or performing in a similar manner, maintaining uniformity in actions over time.

Distinctiveness

The quality of being noticeably different from something else, especially from others in the same category or group.

Consensus

General agreement among the members of a group or community, often used as a decision-making process in collaborative environments.