Final answer:
The $23,000 spent on applying for a patent should be treated as an initial cost when evaluating the NPV for a project, as it is a necessary upfront investment that impacts the project's future profitability and cash flows.
Step-by-step explanation:
When evaluating the Net Present Value (NPV) of a project to manufacture a product based on a new invention, the company should treat the $23,000 spent last week in applying for a patent as an initial cost. This cost is part of the upfront investment needed to get the project underway and should be included in the calculation of NPV as it directly affects the profitability and cash flow of the project. Any past costs that are relevant to the project's development and future cash flows, such as patent application fees, are considered upfront investments and must be accounted for in the NPV analysis to ensure an accurate assessment of the project's potential.