Which of the Following Statements Is FALSE

question 1

Multiple Choice

Which of the following statements is FALSE?

• A)Traditionally,managers have used the equivalent annual benefit method to choose between projects of different lives.
• B)The equivalent annual benefit method ignores the value of any real options because it assumes that the projects will always be replaced at their original terms.
• C)If the future costs (or benefits)are certain with mutually exclusive projects,then we must use a real options approach to determine the correct decision.
• D)The equivalent annual benefit method accounts for the difference in project lengths by calculating the constant payment over the life of the project that is equivalent to receiving the NPV today and then selecting the project with the higher equivalent annual benefit.

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Definitions:

Distribution

The process of making a product or service available for the consumer or business user that needs it, through various channels.

Financing

The process of providing funds for business activities, making purchases, or investing, including loans, equity investments, and other forms of financial support.

Grading

The process of categorizing products based on quality, size, or other characteristics to meet specified standards.

Logistical Function

Logistical function involves planning, implementing, and controlling the efficient and effective forward and reverse flow and storage of goods, services, and related information from point of origin to point of consumption.