Which of the Following Statements Is INCORRECT

question 6

Multiple Choice

Which of the following statements is INCORRECT?

• A)In general,money today is worth more than money in one year.
• B)We define the risk-free interest rate,rf,for a given period as the interest rate at which money can be borrowed or lent without risk over that period.
• C)We refer to (1 - rf)as the interest rate factor for risk-free cash flows.
• D)For most financial decisions,costs and benefits occur at different points in time.

---

Definitions:

Economic Environment

The conditions of the economic system in which an organization operates, including factors like inflation, employment rates, and gross domestic product.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Current Rate Method

An accounting method used in translating foreign currency financial statements, where all current and non-current assets and liabilities are translated at the current exchange rate.

Translation Adjustment

A financial reporting adjustment made to convert financial statements in a foreign currency into the reporting currency of the business, reflecting changes in exchange rates.