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Two years ago, your firm spent $25,000 on marketing research regarding potential expansion into a new geographical area. If you are evaluating the decision to
Two years ago, your firm spent $25,000 on marketing research regarding potential expansion into a new geographical area. If you are evaluating the decision to go forward with this expansion today, how should you incorporate the cost of the research into your incremental cash flow estimates?
subtract $25,000 from after-tax cash flow in year 0
ignore the $25,000
subtract $25,000 from EBIT in year 0 and then compute taxes
depreciate the $25,000 over the life of the project
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