Flotation Costs

question 221

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:

Dual-Center Theory

The hypothesis that one area in the lateral hypothalamus is the “on” center, the initiator of eating, while another area in the ventromedial hypothalamus is the “off” center, the terminator of eating. Current evidence indicates that although these brain regions are crucial for eating, the regulation of eating also involves other circuits.

Lateral Region

An area situated at the side of an organ or structure within the body.

Hypothalamus

A small but crucial part of the brain's limbic system, involved in many functions, including hormone regulation, temperature control, and management of hunger and thirst.

Leptin

a hormone produced by fat cells that helps to regulate energy balance by inhibiting hunger.