Flotation Costs for a Levered Firm Should

question 16

Multiple Choice

Flotation costs for a levered firm should:

• A)be ignored when analyzing a project because they are not an actual project cost.
• B)be spread over the life of a project thereby reducing the cash flows for each year of the project.
• C)only be considered when two projects are mutually exclusive.
• D)be weighted and included in the initial cash flow.
• E)be totally ignored when internal equity funding is utilized.

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