Which of the Following Statements Is FALSE

question 59

Multiple Choice

Which of the following statements is FALSE?

• A)The terminal or continuation value of the project represents the market value (as of the last forecast period)of the free cash flow from the project at all future dates.
• B)The incremental effect of a project on the firm's available cash is the project's free cash flow.
• C)(1 - τc)× Depreciation is called the depreciation tax shield.
• D)To evaluate a capital budgeting decision,we must determine its consequences for the firm's available cash.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.

Homogeneous Products

Refers to goods that are identical in quality and features, making them perfect substitutes for each other in the eyes of consumers.

Decision Variable

A variable that represents choices available to the decision-maker in problem-solving or optimization scenarios.

Barriers

Obstacles that prevent entry into a market or impede growth and can be economic, regulatory, technological, or cultural.