Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A)A simple method often used to calculate depreciation is the straight-line method.
• B)A sunk cost is any unrecoverable cost for which the firm is already liable.
• C)Unlevered Net Income = EBIT × τc.
• D)The decision to continue or abandon a project should be based only on the incremental costs and benefits of the project going forward.

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Definitions:

Crude Quantity Theory

A basic economic theory suggesting that the amount of money in supply directly affects the price level and inflation in an economy.

Sophisticated Quantity Theory

An advanced approach to Quantity Theory of Money, considering complex factors influencing money supply and demand.

Deflation

A decline in the price level for at least two years.

Keynesians

Economists and thinkers following the theories of John Maynard Keynes, who advocate for active government intervention in the economy to manage demand and avoid economic recessions.