Which of the Following Statements Is Most Correct

question 9

Multiple Choice

Which of the following statements is most correct?

• A) The rate of depreciation will often affect operating cash flows, even though depreciation is not a cash expense.
• B) Corporations should fully account for sunk costs when making investment decisions.
• C) Corporations should fully account for opportunity costs when making investment decisions.
• D) All of the answers above are correct.
• E) Answers a and c are correct.

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Definitions:

Holder

An individual or entity that possesses a legal or financial instrument, such as a check or bond.

Ordinary Care

A legal standard requiring individuals to exercise the level of care that a reasonably prudent person would in similar circumstances, aiming to avoid harm to others.

Impostor Rule

A legal principle that protects persons who, in good faith, pay or act upon the instructions of someone falsely purporting to represent another.

Order Paper

A document listing all the items of business scheduled to be considered by a parliament or other legislative body on a specific day.