Floatation Costs Are Incorporated into the APV Framework By

question 35

Multiple Choice

Floatation costs are incorporated into the APV framework by:

• A) adding them into the all equity value of the project.
• B) subtracting them from the all equity value of the project.
• C) incorporating them into the WACC.
• D) disregarding them.

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Definitions:

Total Utility

The overall satisfaction or pleasure a consumer derives from consuming a certain quantity of goods or services.

Marginal Utility

The extra fulfillment or advantage a person gains by consuming an additional unit of a product or service.

Satisfaction

The feeling of pleasure or fulfillment that comes from achieving a goal or satisfying a need.