Which of the Following Statements Is FALSE

question 168

Multiple Choice

Which of the following statements is FALSE?

• A) A perfectly inelastic supply curve is a vertical line.
• B) Time is an important consideration in determining supply elasticity.
• C) Price elasticity of supply can never equal 1.
• D) A horizontal supply curve is possible.

Assess equipment replacement decisions based on cost savings and incremental cash inflows.

Determine the payback period for investment projects.

Calculate simple rates of return on investments.

Understand the concept and calculation of Internal Rate of Return (IRR).

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Definitions:

Overhead Cost

Indirect expenses related to the general operation of a company, including administrative and facility costs not directly tied to production.

Activity-Based Costing

A costing method that assigns costs to products based on the activities required to produce them, improving accuracy by identifying cost drivers.

Machine-Hours

A measure of production time, expressed in hours, that machinery is operating.

Equipment Depreciation

The process of allocating the cost of tangible assets over their useful lives, reflecting the decrease in value of equipment over time.