Which of the Following Statements Regarding the Valuing of Costs

question 59

Multiple Choice

Which of the following statements regarding the valuing of costs and benefits is NOT correct?

• A)The first step in evaluating a project is to identify its costs and benefits.
• B)In the absence of competitive markets,we can use one-sided prices to determine exact cash values.
• C)Competitive market prices allow us to calculate the value of a decision without worrying about the tastes or opinions of the decision maker.
• D)Because competitive markets exist for most commodities and financial assets,we can use them to determine cash values and evaluate decisions in most situations.

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Definitions:

Financial Statements

Reports that summarize the financial performance and financial position of a company, including the balance sheet, income statement, and statement of cash flows.

Disclosed

Information that has been revealed, reported, or made known to the public or relevant authorities.

Reportable Segment Sales Revenue

The revenue generated from sales within a specific segment of a business that must be reported separately in financial statements according to accounting standards.

Consolidation Process

The procedure in financial accounting by which the financial statements of a parent company and its subsidiaries are combined to present as those of a single economic entity, adjusting for intragroup transactions and balances.