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When Flotation Costs Are Involved, a Project's Initial Investment Should

Question 132

Multiple Choice

When flotation costs are involved, a project's initial investment should be computed as


A) project investment + flotation costs.
B) project investment x (1+ weighted average flotation costs.
C) project investment/(1-weighted average flotation cost) .
D) project investment is unaffected, but the cost of capital must be adjusted for flotation costs.

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