Which of the Following Does NOT Correctly Complete This Sentence

question 112

Multiple Choice

Which of the following does NOT correctly complete this sentence: A project that just breaks even in an accounting sense ___________________.

• A) Will lose money in a financial sense.
• B) Will result in zero taxes paid.
• C) Will not contribute to net income for the firm.
• D) Will have a payback period less than the life of the project.
• E) Will have operating cash flow equal to depreciation expense.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed.

FIFO Method

Stands for "First-In, First-Out," a technique to value inventory and determine the cost of goods sold by assuming that the oldest items are sold first.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.

Inventory

The total value of a company's raw materials, work-in-process, and finished goods that are considered a current asset on the balance sheet.