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.

---

Definitions:

High-Poverty

refers to areas or populations experiencing widespread economic hardship, where a significant portion of the community lives below the poverty line.

Correlation

A statistical measure that describes the extent to which two variables change together, but does not necessarily imply causation.

Causation

The relationship between cause and effect where one event (the cause) makes another event happen (the effect).

Usage Tax

Usage tax is a levy on the use of goods or services, typically calculated as a percentage of the purchasing price or a flat rate, aimed at specific products or activities.