Which of the Following Statements Is Incorrect

question 155

Multiple Choice

Which of the following statements is incorrect?

• A) The further into the future a cash receipt is expected to occur, the lower is its present value.
• B) The return on investment measures the compensation a company expects to receive from investing in capital assets.
• C) Most companies use their cost of capital to estimate the minimum return on investment required from capital investments.
• D) When a company invests in capital assets, it sacrifices future dollars for the opportunity to receive present dollars.

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Definitions:

Custom Duties

Taxes imposed on the import and export of goods between countries.

Procedural Due Process

Legal doctrine that requires the government to follow fair procedures before depriving a person of life, liberty, or property.

Entitlements

Benefits or rights granted by law, such as Social Security in the United States.

Social Security

A government program that provides financial assistance to people who are retired, disabled, or survivors of deceased workers.