Which of the Following Statements Is False

question 131

Multiple Choice

Which of the following statements is false?

• A)Two individuals who have the same current income but different permanent incomes are likely to make very similar savings decisions.
• B)An individual with a relatively low current income but a high permanent income might save little or nothing now, expecting to save for retirement and for bequests later.
• C)A person with a relatively low income now with no expectation of higher income later might try to save some money now to provide for retirement or bequests later.
• D)A decision to save a certain amount determines how much will be available for future consumption.

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Definitions:

Capital Budgeting

The process a business undertakes to evaluate potential major projects or investments, analyzing the expected cash flows to determine their profitability.

Capital Budgeting

Involves analyzing potential investments and projects for their future cash flows and profitability to ensure they align with overall company goals and financial strategies.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting its liquidity.

NPV Profiles

Graphical representations showing the relationship between a project's Net Present Value (NPV) and various discount rates.