Which of the Following Statements Is FALSE

question 51

Multiple Choice

Which of the following statements is FALSE?

• A)In the real world,specific projects should differ only slightly from the average investment made by the firm.
• B)We can estimate rU for a new project by looking at single-division firms that have similar business risks.
• C)The project's equity cost of capital depends on its unlevered cost of capital,rU,and the debt-equity ratio of the incremental financing that will be put in place to support the project.
• D)Projects may vary in the amount of leverage they will support-for example,acquisitions of real estate or capital equipment are often highly levered,whereas investments in intellectual property are not.

---

Definitions:

Behaviorism

A theory in psychology that focuses on observable behaviors and disregards mental processes.

Psychoanalysis

Freud’s theory of personality that attributes thoughts and actions to unconscious motives and conflicts. Freud’s therapeutic technique used in treating psychological disorders. Freud believed the patient’s free associations, resistances, dreams, and transferences—and the analyst’s interpretations of them—released previously repressed feelings, allowing the patient to gain self-insight.

Humanistic Psychology

A historically significant perspective that emphasized human growth potential.

Evolutionary Psychology

A theoretical approach in the social and natural sciences that examines psychological structure from a modern evolutionary perspective.