Which of the Following Statements Is Incorrect

question 5

Multiple Choice

Which of the following statements is incorrect?

• A)borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds
• B)a qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale
• C)financial assets and inventories that are manufactured or otherwise produced over a short period of time,and assets that are ready for their intended use or sale when acquired,are not qualifying assets
• D)financial assets and inventories that are manufactured or otherwise produced over a short period of time,and assets that are ready for their intended use or sale when acquired,are qualifying assets

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Definitions:

Financial Break-even Point

The level of earnings before interest and taxes (EBIT) where the company's total revenues equals its total expenses.

Real Option

A financial concept representing the choice a company has to undertake certain business decisions, like investment opportunities, waiting for more information before committing.

Option to Wait

The strategic choice to delay a decision or an investment to gather more information or wait for a more favorable market condition.

Option to Abandon

A business decision making tool that allows a company to cease an investment or project if it turns out to be financially nonviable, minimizing losses.