All of the Following Statements Are Correct Except

question 143

Multiple Choice

All of the following statements are correct except:

• A) Capital budgeting is the process of identifying, evaluating, and implementing a firm's investment opportunities.
• B) Capital budgeting seeks to identify projects that will enhance a firm's competitive advantage and by so doing increase shareholders' wealth.
• C) By its nature, capital budgeting involves long-term projects, although capital budgeting techniques also can be applied to working capital decisions
• D) Capital budgeting projects usually require small initial investments and may involve acquiring or constructing plant and equipment.

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Definitions:

Long Run

A period sufficient for all inputs and production processes to be adjusted, including changing the scale of production facilities.

Average Fixed Costs

Average Fixed Costs are the total fixed costs of production divided by the quantity of output produced.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or output in the short run, such as rent or salaries.

TFC

Total Fixed Cost, which refers to the sum of all costs that do not change with the level of output produced by a firm.