Flotation Costs for a Levered Firm Should Be

Multiple Choice

Flotation costs for a levered firm should be:

A) ignored when analyzing a project because they are a sunk cost.
B) spread over the life of a project thereby reducing the cash flows for each year of the project.
C) considered only when two projects are mutually exclusive.
D) weighted and included in the initial cash flow.
E) totally ignored when internal equity funding is utilized.