Which of the Following Statements Is CORRECT

question 66

Multiple Choice

Which of the following statements is CORRECT?

• A) In a capital budgeting analysis where part of the funds used to finance the project would be raised as debt, failure to include interest expense as a cost when determining the project's cash flows will lead to a downward bias in the NPV.
• B) The existence of any type of "externality" will reduce the calculated NPV versus the NPV that would exist without the externality.
• C) If one of the assets to be used by a potential project is already owned by the firm, and if that asset could be sold or leased to another firm if the new project were not undertaken, then the net after-tax proceeds that could be obtained should be charged as a cost to the project under consideration.
• D) If one of the assets to be used by a potential project is already owned by the firm but is not being used, then any costs associated with that asset is a sunk cost and should be ignored.
• E) In a capital budgeting analysis where part of the funds used to finance the project would be raised as debt, failure to include interest expense as a cost when determining the project's cash flows will lead to an upward bias in the NPV.

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Definitions:

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Toys that are marketed or designed specifically for children of a particular gender, reinforcing traditional gender roles.

Socialization

The process by which individuals internalize the values, beliefs, and norms of a society and learn to function as members of that society.

Traditional Gender Roles

Socially and culturally defined prescriptions and beliefs about the behavior and responsibilities of men and women, often based on normative concepts of masculinity and femininity.

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Children who have lived isolated from human contact from a very young age, and have little or no experience of human care, behavior, or language.