Which of the Following Statements Is FALSE

question 61

Multiple Choice

Which of the following statements is FALSE?

• A)Project externalities are direct effects of the project that may increase or decrease the profits of the business activities of other firms.
• B)Incremental earnings are the amount by which the firm's earnings are expected to change as a result of the investment decision.
• C)The average selling price of a product and its cost of production will generally change over time.
• D)Any money that has already been spent is a sunk cost and therefore irrelevant in the capital budgeting process.

Assess the relevance of specific costs and revenue factors in segment elimination and make-or-buy decisions.

Calculate cash payback period and its importance in assessing investment opportunities.

Estimate internal and annual rate of return to evaluate the profitability of investments.

Understand the basic premises of evolutionary theory, including natural selection and reproductive success.