Which of the Following Statements Is FALSE

question 37

Multiple Choice

Which of the following statements is FALSE?

• A)Sales will ultimately decline as the product nears obsolescence or faces increased competition.
• B)Managers sometimes continue to invest in a project that has a negative NPV because they have already invested a large amount in the project and feel that by not continuing it,the prior investment will be wasted.
• C)With straight-line depreciation the asset's cost is divided equally over its life.
• D)A project's unlevered net income is equal to its incremental revenues less costs and depreciation,evaluated on a pre-tax basis.

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Definitions:

Stable Unit

A financial assumption that the value of currency will remain relatively stable over time, affecting long-term economic projections.

Canadian GAAP

The Generally Accepted Accounting Principles in Canada, comprising standards for financial reporting for Canadian companies.

Public Market

A marketplace that is open to the general public, often referring to the stock market where securities are bought and sold.

IFRS

International Financial Reporting Standards, a set of accounting standards globally adopted for financial reporting.