Which of the Following Statements Is FALSE

question 80

Multiple Choice

Which of the following statements is FALSE?

• A)Sales will ultimately decline as the product nears obsolescence or faces increased competition.
• B)Managers sometimes continue to invest in a project that has a negative NPV because they have already invested a large amount in the project and feel that by not continuing it,the prior investment will wasted.
• C)With straight-line depreciation the asset's cost is divided equally over its life.
• D)A projects unlevered net income is equal to its incremental revenues less costs and depreciation,evaluated on an pre-tax basis.

---

Definitions:

Working Capital

The measure of a company's short-term liquidity, calculated as current assets minus current liabilities.

Salvage Value

The approximated financial value of an asset at the termination of its usability.

Required Rate of Return

The minimum percentage rate of return on an investment that a person or company deems acceptable, considering the risks involved.

Warehouse Cost

Expenses associated with storing, handling, and managing goods in a warehouse.