Is your boss approach correct

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Reference no: EM132004391

Suppose your boss comes to you and asks you to reevaluate a capital budgeting project. The first evaluation was in error, he expalins, because it ignored flotation costs.

To correct for this, he asks you to evaluate the project using higher cost of capital which incoporates these costs.

Is your boss approach correct? Why or why not?

Reference no: EM132004391

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