Identify Which One of the Following Statements Is True

question 31

Multiple Choice

Identify which one of the following statements is true.

• A)Comparisons between alternatives are best made without considering tax effects.
• B)Predictions of cash flows and discount rates should be computed without regard to inflation.
• C)When two projects are mutually exclusive, the project that has the smallest net present value should be undertaken.
• D)If alternate projects have unequal lives, comparisons may be made over the useful life of either the longer-lived project or the shorter-lived one.

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Definitions:

Inferior Good

A type of good whose demand decreases as the income of consumers increases, inverse to normal goods.

Consumer Incomes

The total earnings received by consumers, including wages, salaries, benefits, and other income sources, which affect their purchasing power.

Farm Income

The earnings from agricultural operations, including the sale of crops, livestock, and other farm-related sources.

Farm Household

A living arrangement where families live and work primarily on a farm producing agricultural goods.