Flotation costs:

Question

Flotation costs:

Quizplus · Accepted Answer

Flotation costs refer to the costs associated with issuing new securities, such as underwriting fees, legal fees, and registration fees. These costs are typically incurred at the initiation of a project and should be included as an initial cash outflow of the project. Ignoring these costs can lead to an underestimation of the true cost of the project and may result in incorrect investment decisions. Therefore, the best choice is (E) Should be included as an initial cash outflow of the project.

Flotation Costs