Which of the Following Statements Is FALSE

question 67

Multiple Choice

Which of the following statements is FALSE?

• A)Because value is lost when a resource is used by another project,we should include the opportunity cost as an incremental cost of the project.
• B)Sunk costs are incremental with respect to the current decision regarding the project and should be included in its analysis.
• C)Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect many different areas of the corporation.
• D)When computing the incremental earnings of an investment decision,we should include all changes between the firm's earnings with the project versus without the project.

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Definitions:

Capital Budgeting

The process by which a business evaluates and selects long-term investments based on their potential to generate future profit.

Long-Term Investments

Long-term investments are financial assets intended to be held for a period longer than one year, aiming for higher returns over time.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Auction Market

A public market in which goods or securities are sold to the highest bidder.