Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)A serious concern for large corporations is that managers may make large,unprofitable investments.
• B)While overspending on personal perks may be a problem for large firms,these costs are likely to be small relative to the overall value of the firm.
• C)Some financial economists explain a manager's willingness to engage in negative-NPV investments as empire building.
• D)While ownership is often diluted for small,young firms,ownership typically becomes concentrated over time as a firm grows.

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Definitions:

Original Cost

The initial amount of money spent to acquire an asset, before depreciation or amortization is taken into account.

Required Rate Of Return

The minimum percentage return an investor expects to receive from an investment due to its risk level.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and efficiency.